Axis Capital (ACL) was flagged by research analyst Hemindra Kishen Hazari for irregularities in handling a non-convertible debenture (NCD) issue for Sojo Infotel Pvt. Ltd. Sebi’s interim order, following Hazari’s article, restrains ACL from acting as a merchant banker in the debt market.
The issue stemmed from ACL’s commitment to purchase pledged shares if Sojo defaulted, which Sebi deemed a guarantee, not permitted under underwriting rules, as it posed a financial risk. The arrangement violated Sebi’s regulations for merchant bankers.
Foreign inflows into Indian government bonds, following India’s inclusion in global bond indices, may reduce banks’ role in financing the Centre’s debt and lead to a lower statutory liquidity ratio (SLR) in the long term, according to S&P Global.
JP Morgan’s inclusion of Indian bonds in its EM bond index could bring $20-$25 billion in foreign investment. This increased foreign participation is expected to ease reliance on domestic funding sources, expand India’s bond market, and reduce crowding-out in domestic debt markets.
SEBI has amended rules to streamline public issuance of debt securities, reducing the public comment period on draft offer documents and the minimum subscription period. Key changes include shortening the public comment period to 1-5 days, reducing the subscription period from 3 to 2 days, and allowing more flexibility in advertising public issues.
Disclosure requirements have been simplified, removing the need for PAN and personal address details of promoters in offer documents. The goal is to provide faster access to funds and ease business for issuers.
