2 hrs ago

SEBI Eases Merchant Banker Rule for Eligible Private Debt Issuers

SEBI has changed a rule for some companies that want to raise money by selling debt privately.

In the past, these issuers generally had to hire a merchant banker.

Now, some listed and financially regulated issuers can skip that step if they meet strict conditions.

They must have been listed for at least a year and have no specified unpaid penalties or recent repayment defaults.

Their debt must usually be senior, secured, and rated AA- or higher.

Some public-sector issuers can issue unsecured debt under this exemption.

Stock exchanges will check whether issuers qualify.

The change applies immediately and is intended to make issuing debt easier and expand access to highly rated securities.

Key facts

Eligible issuers: Must be regulated by SEBI, the Reserve Bank of India, IRDAI or PFRDA.
Listing history: At least one year on a recognised stock exchange.
Compliance: No pending SEBI or stock-exchange fines or penalties for applicable listing-regulation violations.
Repayment record: No defaults in the previous three financial years or current financial year on specified debt, preference-share, securitised debt, commercial paper, deposit or loan obligations.
Security: Generally senior or unsubordinated, secured by a first or pari passu charge on identifiable issuer assets.
Public-sector exception: Central Public Sector Enterprises, PSUs and statutory bodies may issue secured or unsecured securities.
Minimum credit rating: AA- at issuance; the lowest rating is used if the issue has multiple ratings.
Verification: A statutory auditor's certificate is required for the repayment record, and stock exchanges confirm eligibility at in-principle approval.

CNBC TV 18 · 2 hrs ago