SEBI likely to implement 'tap issue of bonds' mechanism in FY20

Tarun Sharma Moneycontrol News

The Securities and Exchange Board of India (SEBI) has almost finalised the mechanism for tap issue of bonds through a shelf offer document and could implement it from FY20.

Under tap issue, companies will be allowed to file shelf prospectus on the same lines as private placements, once a year and raise money when required without going through the process of seeking approval from regulatory authorities.

Recently, SEBI held a meeting with stock exchanges and intermediaries in this regard.

A source who attended the meeting told Moneycontrol, "The move would reduce the issuance cost for companies. At present, companies file an offer document each time they require public issuance of debt. In instances when yields are low and the market is favorable for a company to raise money, it takes about two to three months to get clearances. But by then, the situation of the market has changed."