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Tag: Securities and Exchange Board of India

  • SEBI Approves JSW Cement’s Plan to Raise INR 4,000 Cr Through an IPO

    The Securities and Exchange Board of India (SEBI), which oversees capital markets, has given JSW Cement Limited, a division of the global conglomerate JSW Group, its final approval to raise INR 4000 crore through an initial public offering (IPO).

    On August 16, the business submitted its IPO documents to the market watchdog. An offer for sale (OFS) of up to INR 2000 crore by Investor Selling Shareholders and a fresh issuance of shares up to INR 2000 crore are both included in the IPO, which has a face value of INR 10 per. AP Asia Opportunistic Holdings Pte. Ltd. is offering up to 937.50 crore, Synergy Metals Investments Holding Limited is offering up to 937.50 crore, and State Bank of India is offering up to 125 crore.

    How Firm is Planning to Utilise Funds?

    As a pre-IPO placement, the company may investigate the prospect of collecting up to INR 400 crore through a preferential allotment or other means after consulting with the book-running lead managers. The size of the new issue will be changed appropriately if this placement is carried out correctly.

    INR 800 crore will be used by the company to partially finance the construction of a new integrated cement facility in Nagaur, Rajasthan; INR 720 crore will be used for the full or partial prepayment or repayment of some outstanding debts; and the remaining sum will be used for general business purposes.

    The offer’s registrar is KFin Technologies Limited, while the book running lead managers are JM Financial Limited, Axis Capital Limited, Citigroup Global Markets India Private Limited, DAM Capital Advisors Limited, Goldman Sachs (India) Securities Private Limited, Jefferies India Private Limited, Kotak Mahindra Capital Company Limited, and SBI Capital Markets Limited. It is suggested that the equity shares be listed on the NSE and BSE.

    About JSW Cement

    According to a CRISIL Report, JSW Cement is among the fastest-growing cement manufacturers in India in terms of installed grinding capacity and sales volume between fiscal 2014 and fiscal 2024. Among the top 10 cement makers by installed capacity, it was also one of the fastest-growing cement production companies in India in terms of sales volume from Fiscal 2023 to Fiscal 2024.

    According to the CRISIL Report, the company’s sales volume increased by 31.11% in Fiscal 2023 (not including sales from JSW Cement FZC), greatly exceeding the industry average growth of 6.35%.

    In contrast to the industry norms of 7.31% and 7.56%, respectively, JSW Cement’s installed grinding capacity and sales volume expanded at compound annual growth rates (CAGR) of 14.14% and 19.06% over this time, according to CRISIL.

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  • SEBI Issues Warning Regarding Virtual Stock Games Utilising Real-Time Data

    Investors are being cautioned by the Securities and Exchange Board of India (SEBI) about unapproved virtual trading and gaming platforms that provide services and advice based on stock prices. SEBI underlined that these platforms breach important investor protection regulations and function without regulatory license.

    “The Securities and Exchange Board of India has discovered that certain apps, web applications, and platforms are providing the public with virtual trading services, paper trading, or fantasy games based on stock price data of listed companies,” stated SEBI in a circular released on 5 November 2024. 

    According to SEBI, these actions are against the Securities Contract (Regulation) Act of 1956 and the SEBI Act of 1992, which are legislation designed to safeguard investors. The warning is in connection to an earlier advice from SEBI on August 30, 2016, which warned against securities market leagues, schemes, and tournaments, some of which gave out prize money.

    SEBI reaffirmed that only registered intermediaries should be used by investors to trade and make investments. SEBI has no jurisdiction over unapproved platforms. Furthermore, SEBI’s procedures are unlikely to provide protection or grievance redress for any problems resulting from such unregistered schemes or platforms. 

    The circular further emphasised that investors who use unapproved platforms have no alternative. They would not have access to investor grievance procedures run by exchanges or the online dispute resolution tool, Smart ODR, and they will not be eligible for safeguards under SEBI’s authority, such as SEBI’s Complaints Redress System (SCORES).

    Why SEBI is so Concerned?

    The markets watchdog is worried that these operations resemble “dabba trading,” an unlawful practice that uses unapproved channels, even though SEBI’s most recent warning does not name specific organisations, according to a media report. The regulator limited the access for virtual stock games in May of this year by ordering depositories and stock exchanges to cease supplying real-time pricing data to third-party apps. This regulation, which specifically targeted apps that offer cash prizes or gamify real-time stock movements, attempted to prevent users from forming irrational expectations about the equities market or taking risks based on virtual accomplishments. According to the same media report, stock exchanges have also warned organisations that use information that was scraped from their websites or brokers’ websites.

    What is a Fantasy Stock Game Like?

    Stock investing can be dangerous since prices might suddenly decline, resulting in possible losses as well as extra fees and taxes. On the other hand, fantasy stock game applications claim to be a safer substitute. For a nominal admission fee, users can forecast price movements by simulating stock trading using real stock data from exchanges such as the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). Users could win cash prizes, luxury goods, or gold coins if their predictions come true. The admission fee, which is much less than the true costs of trading, is all that is lost if the user’s prediction goes wrong.

    These apps that use real-time data from regulated exchanges are disapproved by SEBI. According to SEBI, these platforms use market data to draw users, possibly leading them to mistakenly believe that virtual success is equivalent to actual trading prowess. In contrast to actual trading, these apps are unregulated and exempt from risk disclosure requirements.

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  • To Make Investments Easier, SEBI Revises Regulations for Foreign Venture Capital Investors’ Registration

    Foreign Venture Capital Investors (FVCIs) can now be more easily registered thanks to new regulations announced by the capital markets regulator Sebi. Designated depository participants (DDPs) are now responsible for evaluating post-registration references and granting registration to foreign variable capital investment (FVCI) companies, in accordance with the rules established for foreign portfolio investors (FPIs).

    The process of acquiring a registration certificate as an FVCI begins with an application engaging a DDP, and the DDP and custodian of the FVCI must always remain a single entity.

    Currently, the Securities and Exchange Board of India (Sebi) handles the processing of applications for registering FVCIs and any associated due diligence.

    In a notice published on September 6, the regulator, Sebi, stated that to engage in securities transactions as a foreign venture capital investor, one must first obtain a certificate issued by a certified depository participant on behalf of the Board (Sebi).

    What Steps Do FCVIs Need to Follow?

    A domestic custodian must be appointed by FVCIs under the current regulations to oversee FVCI investments in India and provide Sebi with reports and other information regularly.

    If the notice is to be believed, before making any investments subject to these restrictions, a foreign VC or global custodian representing the VC must engage in an arrangement with a designated depository participant and a custodian.

    Eligibility Criteria for FVCI

    The eligibility criteria for FVCI have also been expanded by the regulator to include Overseas Citizens of India (OCIs), Non Resident Indians (NRIs), and Resident Indians (RIs). The following requirements must be met: the total contribution from all NRIs, OCIs, and RIs must not exceed 25% of the applicant’s corpus; the combined contribution from all of them must not exceed 50% of the applicant’s corpus; and they must not be under the applicant’s control.

    Investment trusts, mutual funds, endowment funds, pension funds, investment partnerships, asset management companies, investment managers, and university endowment funds, as well as any other investment vehicle incorporated outside of India, are currently eligible to apply for registration as an FVCI.

    Additionally, FVCIs must save their assets in a demat format. This will be put into action on January 1, 2025, thanks to Sebi’s revised regulations for foreign venture capital investors.

    Founded and based outside of India, FVCI is a major investor in the unlisted stocks of VC funds and venture capital undertakings. So far in March of 2023, 269 FVCIs have been recorded with Sebi. Additionally, within the same period, FVCIs invested a total of INR 48,286 crore directly into investee companies.

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