SEBI eases norms for stressed asset deals, exempts PE firms from IPO lock-in

SEBI has eased rules for investors looking to acquire stressed assets from banks, as it unveiled a series of measures to help lenders deal with rising bad debt, deepen capital markets and boost investor sentiment. Investors buying distressed assets from banks will no longer have to make an open offer to shareholders. However, such relaxations will be subject to certain conditions like approval by the shareholders of the companies by a special resolution and lock-in of their shareholding for a minimum period of three years. Separately, the capital markets regulator exempted Category II alternative investment funds, comprising private equity (PE) firms and real estate funds, from the one-year lock-in period in initial public offerings (IPOs). This will bring about uniformity, facilitate the ease of doing business and expand the investor base available for capital raising.