Over the past several years, the listed NCD market has opened up to smaller corporates and financial institutions.
have sought an amendment to the Securities and Exchange Board of India (Sebi) regulations, seeking easier disclosure requirements pertaining to the furnishing of audited financial figures of the last three years for private placement of debentures. At present, Sebi
norms require the stand-alone financial information (such as P&L statement and balance sheet) for the last three years as well as auditor qualifications, from the issuer seeking to issue listed non-convertible debentures (NCDs).
Finance Industry Development Council (FIDC), in a communication to the Sebi
chairman, said: “We respectfully submit that the said regulations be amended for private placement of NCDs.
are directed towards sophisticated investors, who will be able to make a distinction between issuers based on intensive disclosures required for such issuances.”
The listing regulations impose significant governance and disclosure requirements on entities seeking to issue listed NCDs.
They are required to have a diversified and independent board, semi-annual disclosure of financial statements, and mandatory disclosures of inter alia, abridged version of audited consolidated (wherever available) and stand-alone financial information.
in such privately placed NCDs will be able to draw their own assessment of issuers, said the FIDC. Over the past several years, the listed NCD market has opened up to smaller corporates and financial institutions. This has been driven by better information symmetry, inflow of funds from impact investors, and the willingness of capital market investors
to invest in lower-rated and lower-vintage issuers. All of this has led to the deepening of the NCD market and yield curve down the rating scale, the FIDC added.