SEBI Proposes Mandatory Electronic Book Mechanism for Debt Issues Over Rs 20 Crore

SEBI has proposed mandating electronic book mechanisms for private placement debt issues above Rs 20 crore, and is considering extending this to REITs and InvITs. The move aims to enhance market efficiency, with proposals to modify existing rules, including anchor allocation, green shoe options, and bidding procedures.

The Securities and Exchange Board of India (SEBI) is poised to introduce sweeping changes to the private placement debt market, proposing that electronic book mechanisms become mandatory for issues exceeding Rs 20 crore. This initiative targets improved efficiency and adaptability to market fluctuations.

SEBI's consultation paper suggests broadening the electronic book provider platform's functionality to include infrastructure investment trusts (InvITs) and real estate infrastructure trusts (REITs). Currently, a mandatory EBP exists for private placements of debt securities with a base value of Rs 50 crore or more.

Among the strategic proposals, SEBI suggests adjustments to anchor investor disclosures, modifications to green shoe options, and compulsory open bidding for more substantial issues. Additionally, the regulator intends to refine operational processes on the Request for Quote platform, emphasizing transparency and streamlined cash flow reporting from issuers.

(With inputs from agencies.)