Capital market regulator Securities and Exchange Board of India (Sebi) on June 17 relaxed the preferential allotment norms which can help the companies to raise funds faster from promoters. The move comes at a time when a lot of companies are in need of funds to start operations following the countrywide lockdown that last for over two months. The Sebi has allowed promoters to increase their stake in the company by up to 10 percent through preferential allotment, against the limit of 5 percent earlier. The market regulator relaxed preferential allotment norms for promoters till March 2021. “SEBI has now permitted promoters to acquire a further stake in listed companies through preferential allotment of up to 10 percent (as against 5 percent) during FY 2020-21 without triggering open offer. Further, the cooling-off period between two QIPs have been reduced to two weeks as against six months. These measures along with relaxation regarding rights issues permitted earlier are aimed at increasing liquidity for Indian companies,” Nitesh Mehta, Partner / Transaction Tax, Tax & Regulatory Services, BDO India told Moneycontrol.

(Moneycontrol)