Currently, rights issue process takes 55-58 days from the time company decides to launch the issue till listing.
There is a need to reduce the timelines both in the pre-issue opening phase and after issue closure such that the issuer and shareholders benefit from process efficiencies according to Sebi. The watchdog has proposed reduction in period of notice for companies to set a record date from 7 to 3 working days.
Besides, the regulator proposed to eliminate the requirement of giving newspaper advertisement and replacing it with intimation to the shareholders through the stock exchanges and e-mail.
It seeks to make the application and allotment process more efficient by using the banking and depository infrastructure as well as provide issuers with an efficient mechanism for raising funds.
Sebi has also suggested a shift to electronic modes of receiving entitlements, processing, payment and settlement in a rights issue including use of ASBA (Applications Supported by Blocked Amount) as payment mode, among others.