SEBI relaxes merchant banker requirements for listed debt issuers

The Securities and Exchange Board of India (SEBI) has introduced a relaxation in norms regarding the mandatory appointment of merchant bankers for certain listed issuers. Under the new circular, eligible companies can issue debt securities or non-convertible redeemable preference shares through private placement at a face value of Rs. 10,000 without appointing a merchant banker.

To qualify for this exemption, issuers must meet several criteria: they must be regulated by SEBI, RBI, IRDAI, or PFRDA; have been listed on a recognized stock exchange for at least one year without pending fines or penalties related to listing obligations; and must have no history of default on redemption, repayment, or interest/dividend obligations during the last three financial years and the current year.

The debt securities must generally be unsubordinated or senior and secured by a first or pari passu charge. However, Central Public Sector Enterprises (CPSEs), Public Sector Undertakings (PSUs), and statutory bodies are permitted to issue either secured or unsecured debt securities. Additionally, the securities must carry a credit rating of at least AA- on the date of the private placement.