SEBI proposes pricing norms for open offer in PSUs

Securities and Exchange Board of India (Sebi) on Friday decided to dispense with a requirement for calculating open offer price with respect to disinvestment of public sector entities.

As per market regulator’s norms, one of the parameters set to determine open offer price of frequently traded scrip is Volume-Weighted Average Market Price  for 60 trading days immediately preceding the date of the public announcement.

The board, in its meeting has approved amending the takeover regulations in the context of strategic disinvestment of Public Sector Undertakings (PSUs) and consideration payable under open offer.

"The market price of the PSU company undergoing strategic disinvestment becomes susceptible to... periodic disclosures. "Considering the unique nature of transaction and process involved in a PSU disinvestment spanning over a long period, such a requirement of determination of open offer price under the takeover regulations many a time, acts as an impediment in fructifying such strategic disinvestment of PSUs," the market regulator said in a release.

Against this backdrop, it  said its board has approved dispensing with the requirement of calculating 60 days' Volume-Weighted Average Market Price for determination of open offer price in case of disinvestment of PSU companies wherein it results in its change in control, either by way of direct  or indirect acquisition.

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