To increase investor participation SEBI reduces face value for issuing or trading debt security or non-convertible redeemable preference share on private placements from Rs. Ten Lakhs or Rs. One Lakh
The Securities and Exchange Board of India (“SEBI”) has reduced the face value for issuing or trading debt security and non-convertible redeemable preference share issued on private placements from Rs. 10,00,000 to Rs.1,00,000 effective 1st January, 2023.
SEBI had received representations from various market participants to review of the denomination as the high-ticket size was acting as a deterrent to access the market for corporate bonds. If the face value and trading lot is reduced, more investors can participate, which in turn will enhance the liquidity in the corporate bond market.
However, with respect to a shelf placement memorandum which is valid as on January 1, 2023, the issuer will have the option while raising funds through tranche placement memorandum, to keep the face value at Rs. Ten Lakhs or Rs. One Lakh.
