Stories
SEBI Eases Merchant Banker Rules for Listed Issuers Raising Private Debt
- •SEBI has removed the mandatory merchant banker requirement for eligible listed issuers raising private debt under specific conditions.
- •Issuers must be regulated by Indian financial authorities like SEBI, RBI, IRDAI, or PFRDA and listed for at least one year.
- •Eligible companies must maintain a clean repayment record with no defaults over the past three financial years and the current year.
- •The debt securities must carry a credit rating of at least AA- and be secured by a first or pari passu charge on identifiable assets.
Key Questions Answered
Issuers must be regulated by a financial sector regulator like SEBI, RBI, IRDAI, or PFRDA, be listed on a recognized stock exchange for at least one year, have no pending regulatory fines, and maintain a clean repayment record without any defaults over the previous three financial years and the current financial year.
The privately placed debt must carry a credit rating of at least AA- at issuance, and the security must generally be unsubordinated or senior, secured by a first or pari passu charge on identifiable assets, though Central Public Sector Enterprises and statutory bodies may issue secured or unsecured securities.
The regulatory changes aim to make debt issuance easier, reduce compliance costs, and expand retail access to high-rated securities following feedback from market participants.
