‘R’ Limited is a real estate company which was formed in 1950. In about 56 years of its existence the company has managed to carve out a niche for itself in this sector. Lately, this sector is witnessing a boom due to the fact that the Indian economy is on the rise. The incomes of middle class are rising. More people can afford to buy homes for themselves due to easy availability of loans and accompanying tax concessions.
To expand its business in India and abroad the company is weighing various options to raise money through equity offerings in India. Whether to tap equity or debt. market whether to raise money from domestic market or international market or Combination of both? Whether to raise the necessary finance from money market or capital market. It is also planning to list itself in New York Stock Exchange to raise money through ADR’s. To make its offerings attractive it is planning to offer host of financial plans products to its stakeholders and investors and also expand it’s listing at NSE after complying with the regulations of SEBI.
(i) What benefits will the company derive from listing at NSE?
(ii) What are the regulations of SEBI that the company must comply with?
(iii) How does the SEBI exercise control over ‘R’ Limited in the interest of investors?
‘R’ Limited is a real estate company which was formed in 1950. In about 56 years of its existence the company has managed to carve out a niche for itself in this sector. Lately, this sector is witnessing a boom due to the fact that the Indian economy is on the rise. The incomes of middle class are rising. More people can afford to buy homes for themselves due to easy availability of loans and accompanying tax concessions.
To expand its business in India and abroad the company is weighing various options to raise money through equity offerings in India. Whether to tap equity or debt. market whether to raise money from domestic market or international market or Combination of both? Whether to raise the necessary finance from money market or capital market. It is also planning to list itself in New York Stock Exchange to raise money through ADR’s. To make its offerings attractive it is planning to offer host of financial plans products to its stakeholders and investors and also expand it’s listing at NSE after complying with the regulations of SEBI.
(i) What benefits will the company derive from listing at NSE?
(ii) What are the regulations of SEBI that the company must comply with?
(iii) How does the SEBI exercise control over ‘R’ Limited in the interest of investors?
(i) The company would derive the following benefits from listing on NSE.
1. It would ensure that investors all over the country get easy and equal access to the securities of the company.
2. It would enable shorter settlement cycle and book entry settlement.
(ii) The following are the regulations of SEBI that the company must comply with:
1. The company must issue a prospectus with every application wherein the details of the project as well as details about the company (management, history, objectives, etc.) must be mentioned.
2. The subscription should be open for a minimum of 3 days and a maximum of 10 days.
3. The terms and regulations regarding the issue should be clearly mentioned such that investors get a fair idea with regard to risks, returns from the instrument.
4. No collection agent should be appointed for the collection of application money.
(iii) The SEBI would exercise control in the following manner-
1. It would ensure that no unfair trade practices are followed by the company.
2. It would ensure that insider trading is not followed in any manner.
3. It would ensure that various terms and conditions with regard to the issue of shares is properly and clearly disclosed to the investors.
1. It would ensure that investors all over the country get easy and equal access to the securities of the company.
2. It would enable shorter settlement cycle and book entry settlement.
(ii) The following are the regulations of SEBI that the company must comply with:
1. The company must issue a prospectus with every application wherein the details of the project as well as details about the company (management, history, objectives, etc.) must be mentioned.
2. The subscription should be open for a minimum of 3 days and a maximum of 10 days.
3. The terms and regulations regarding the issue should be clearly mentioned such that investors get a fair idea with regard to risks, returns from the instrument.
4. No collection agent should be appointed for the collection of application money.
(iii) The SEBI would exercise control in the following manner-
1. It would ensure that no unfair trade practices are followed by the company.
2. It would ensure that insider trading is not followed in any manner.
3. It would ensure that various terms and conditions with regard to the issue of shares is properly and clearly disclosed to the investors.
