Prof. Jayanth R. Varma’s Financial Markets Blog

A blog on financial markets and their regulation

Faster rights issues in India

The Securities and Exchange Board of India (SEBI) has announced
“changes in timeline [that] would enable a right issue to be
completed within about 43 days as against about 109 days currently
available for a rights issue.” It is indeed very creditable that
SEBI has chose to attack the problem decisively rather than tinker at
the edges.

Just to provide perspective, the ill fated rights issue of HBOS in
the UK took almost three months (from late April to late July) to
complete and during this period a 45% discount to the market price
turned into a premium. After this experience, the UK is also
attempting to bring this period down.

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