Key Regulatory Changes by SEBI
- Anchor investor allocation limit increased based on bond credit rating:
- Up to 50% allocation for bonds rated BBB and below.
- 40% allocation for bonds rated between A+ and A-.
- Earlier, anchor allocation was capped at 30% regardless of rating.
- Mandatory disclosure of anchor investor participation in placement memorandums.
- Anchor investors must provide electronic confirmation of participation by T-1 day; unconfirmed amounts revert to base issue size.
Mandatory Use of Electronic Book Provider (EBP) Platform
- SEBI lowered the threshold for mandatory pricing of private placement issues on EBP from ₹50 crore to ₹20 crore and above.
- Expected to enhance transparency, reduce information asymmetry, and improve price discovery.
Impact and Benefits
- Higher anchor investor limits aim to:
- Help NBFCs and borrowers with credit rating below A attract anchor investors more easily.
- Allow arrangers to take larger initial exposure and then sell down to yield-seeking investors.
- Reduce cases of undersubscription in lower-rated bond issues.
- Increased disclosures on EBP platform to promote:
- Greater investor participation.
- More efficient pricing mechanisms.
- Improved market transparency for smaller issuers.
TET
