News Flashes

Idea plans for IPO

IDEA cellular is looking to expand its operations via acquisitions. And, to finance these buys, it’s thinking of going in for an IPO. The company is eyeing contiguous circles that are operating in the 900Mhz range. The company recently announced its decision to buy Escotel- it provides services to Kerala, Haryana and UP (West). The funds raised through the IPO will be used for both new acquisitions and expansion of existing networks. Idea’s total revenue is Rs 1,300-1,400 crore. The proceeds of the proposed IPO may be used to finance the Escotel acquisition.

ICICI Bank plans IPO offer

ICICI Bank’s thinking of going in for an equity issue. The board will take a final decision on February 10. While the Bank refused to divulge issue details ahead of the board meet, the grapevine pegs the issue size at Rs 2,500-3,000 crore. ICICI Bank has a paid-up equity capital of Rs 615 crore. Of this, total foreign shareholding is 71.4%. The bank has a net worth of Rs 8,150 crore and capital adequacy ratio of 11.3%. Of this, Tier-I capital is 7.2%, while Tier-II capital is 4.1%. Given such a high foreign holding, the bank has a leeway of only 2.6% to raise capital from foreign sources. It has an FII holding of 45.3% and ADR holders account for 26%. According to analyst, the move will help the bank: 1) Raise Tier-I capital adequacy level, with international investors insisting on 8% against the current 7.2% 2) Given a 74% cap on foreign holding, a domestic issue will create more headroom for future FII investment as an enlarged equity base will dilute the foreign holding currently at 71.4% 3) Greater FII investment possibility will boost the scrip, which touched a new high of Rs 336 on Monday and moved up 4% to close at Rs 333.

National Savings Accrued Interest Table

Accrued Interest Table for NSC VIII issue purchased between 01.04.1989 to 31.12.1998. (Rate for Rs.1000/-) Year Rate Year Rate 1st 124 2nd 139 3rd 156 4th 175 5th 197 6th Not Eligible Accrued Interest Table for NSC VIII issue purchased between 01.01.1999 to 14.01.2000. (Rate for Rs.1000/-) Year Rate Year Rate 1st 118.30 2nd 132.30 3rd 148.00 4th 165.40 5th 185.10 6th Not Eligible Accrued Interest Table for NSC VIII issue purchased on or after 15.01.2000 to 28.02.2001 (Rate for Rs.1000/-) Year Rate Year Rate 1st 113.00 2nd 125.80 3rd 140.00 4th 155.80 5th 173.50 6th Not Eligible Accrued Interest Table for NSC VIII issue purchased on or after 01.03.2001. (Rate for Rs.1000/-) Year Rate Year Rate 1st 97.20 2nd 106.70 3rd 117.10 4th 128.50 5th 141.00 6th Not Eligible

Unlisted Companies (Issue of Sweat Equity Shares) Rules, 2003









New Delhi,  the 4th December, 2003



G.S.R.923(E). - In exercise of the powers conferred by proviso to sub-section (1) of section 79A of the Companies Act, 1956 (1 of 1956) read with sub-section (1) of section 642 of the said Act, the Central Government hereby makes the following rules, namely :-


1.         Short title and commencement.-


(1)  These Rules may be called the Unlisted Companies (Issue of Sweat Equity Shares) Rules, 2003.


(2)        They shall come into force on the date of their publication in the Official Gazette.


2.            Definitions.-


In these rules, unless otherwise defined,-


(i)    “Asset” means a resource controlled by the company and from which future economic benefits are expected to flow to the company;


(ii)                (ii)                “employee” means :-


a)      a)      a permanent employee of the company working in India or out of India; or


b) a director of the company, employed as a whole time director or executive director of a company;


 (iii)  “intangible Asset” means an identifiable non-monetary asset, without physical substance, held for use in the production or supply of goods or services, for rental to others, or for administrative purposes;


(iv)  “share price” means price of a share on a given date arrived on the net worth basis;


(v)   “value addition” means anticipated economic benefits derived by the enterprise from expert and/or professional for providing know-how or making available rights in the nature of intellectual property rights, by such person to whom sweat equity is issued for which the consideration is not paid or included in -


(a)      (a)      the normal remuneration payable under the contract of employment, in the case of an employee and/or


(b)     monetary consideration payable under any other contract, in the case of non-employee.


3.            Applicability.-


These Rules shall be applicable to issue of sweat equity shares by all unlisted companies.


4.         Special resolution.-


(1)   For the purpose of passing a special resolution under clause (a) of sub-section (1) of section 79A of the Companies Act, 1956 (1 of 1956), the explanatory statement to be annexed to the notice for the general meeting pursuant to section 173 of the said Act shall contain particulars as specified below.


(i)    the date of the meeting at which the proposal for issue of sweat equity shares was approved by the Board of Directors of the company;


(ii)   the reasons/justification for the issue;


(iii) the number of shares, consideration for such shares and the class or classes of persons to whom such equity shares are to be issued;


(iv) the value of the sweat equity shares alongwith valuation report/ basis of valuation and the price at the which the sweat equity shares will be issued;


(v)                (v)                the names of persons to whom the equity will be issued and the person’s relationship with the company;


(vi)              (vi)              ceiling on managerial remuneration, if any, which will be affected by issuance of such equity;


(vii)             (vii)             a statement to the effect that the company shall conform to the accounting policies specified by the Central Government; and


(viii)           (viii)           diluted earning per share pursuant to the issue of securities to be calculated in accordance with the Accounting Standards specified by the Institute of Chartered Accountants of India.


(2)   Approval of shareholders by way of separate resolution in the general meeting shall be obtained by the company in case of grant of shares to identified employees and promoters, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversion) of the company at the time of grant of the sweat equity shares.


5.            Register of shares.-


The company shall maintain a Register of Sweat Equity Shares issued under section 79A in the Form specified in Schedule annexed to these rules.


6.            Restriction on issue of sweat equity shares.-


The company shall not issue sweat equity shares for more than 15% of total paid up equity share capital in a year or shares of the value of 5 crores of rupees, whichever is higher except with the prior approval of the Central Government.


7.       Disclosure in the Directors’ Report.-


The Board of Directors, shall, inter alia, disclose either in the Directors’ Report or in the annexure to the Director’s Report, the following details of issue of sweat equity shares :-


            (a)            Number of shares to be issued to the employees or the directors;

            (b)            conditions for issue of sweat equity shares;

            (c)            the pricing formula;

(d)   (d)         the total number of shares arising as a result of issue of sweat equity shares;

(e)    (e)          money realised or benefit accrued to the company from the  

            issue of sweat equity shares;


          (f)          diluted Earnings Per Share (EPS) pursuant to issuance of sweat          equity shares.


8.         Pricing of Sweat Equity Shares.-


The price of sweat equity shares to be issued to employees and directors shall be at a fair price calculated by an independent valuer.


9.    Issue of Sweat Equity Shares for consideration other than cash.-


Where a company proposes to issue sweat equity shares for consideration other than cash, it shall comply with following :


(a)     The valuation of the intellectual property or of the know-how provided or other value addition to consideration at which sweat equity capital is issued, shall be carried out by a valuer;


(b)   the valuer shall consult such experts, as he may deem fit, having regard to the nature of the industry and the nature of the property or the value addition;


(c)   the valuer shall submit a valuation report to the company giving justification for the valuation;


(d)   a copy of the valuation report of the valuer shall be sent to the shareholders with the notice of the general meeting;


(e)    (e)    the company shall give justification for issue of sweat equity shares for consideration other than cash, which shall form part of the notice sent for the general meeting; and


(f)     (f)     the amount of Sweat Equity shares issued shall be treated as part of managerial remuneration for the purposes of sections 198, 309, 310, 311 and 387 of the Companies Act, 1956 if the following conditions are fulfilled:



(i)                  (i)                  the Sweat Equity shares are issued to any director or manager; and,

(ii)                (ii)                they are issued for non-cash consideration, which does not take the form of an asset which can be  carried to the balance sheet of the company in accordance with the relevant accounting standards.


10.       Lock-in of sweat equity shares.-


Sweat equity shares issued to employees or directors shall be locked in for a period of three years from the date of allotment.


11.            Certificate from auditors.-


In the case of every company that has allotted shares under these Rules, the Board of Directors shall at each annual general meeting place before the shareholders a certificate from the auditors of the company/ practising company secretary that sweat equity shares have been allotted in accordance with the resolution of the company in the general meeting and these Rules.


12.            Accounting policies.-


(1) Where the sweat equity shares are issued for a non-cash consideration, such non-cash consideration shall be treated in the following manner in the books of account of the company:


(a)       (a)       where the non-cash consideration takes the form of a depreciable or amortizable asset, it shall be carried to the balance sheet of the company in accordance with the relevant accounting standards; or

(b)      (b)      where clause (a) is not applicable, it shall be expensed as provided in the relevant accounting standards.


(2)   In respect of sweat equity shares issued during accounting period, the accounting value of sweat equity shares shall be treated as another form of compensation to the employee or the director in the financial statement of the company.






(Pursuant to Rule 5)


The register of sweat equity shares issued by the company to be kept in the following format:



Folio No. / certificate No.

Date of passing of resolution

Date of issue of sweat equity shares






Name of the allottee

Status of the allottee - whether director or employee

Reference to entry in register of members

Number of sweat equity shares issued






Face value of the share

Price at which shares issued

Total consideration paid by employee/director

Lock in period till which date









[File No: 1/4/2003-CL-V]



Rajiv Mehrishi, Jt. Secretary

Secondary Market for Corporate Debt Securities.

Deputy General Manager

Market Regulation Department – Policy

Email:-[email protected]

Tel : 22845355 Fax: 22845761


September 30, 2003

The Executive Directors/Managing Director/Administrators

Of All Stock Exchanges

Dear Sir/Madam,

Sub:     Secondary Market for Corporate Debt Securities.

1.      Companies have been issuing debt securities on private placement basis from time to time. In order to provide greater transparency to such issuances and to protect the interest of investors in such securities, it has been decided that any listed company making issue of debt securities  on a private placement basis and listed on a stock exchange shall be required to comply with the following:-

1.1.           The company shall make full disclosures (initial and continuing) in the manner prescribed in Schedule II of the Companies Act, 1956, SEBI (Disclosure and Investor Protection) Guidelines, 2000 and the Listing Agreement with the exchanges. However, if the privately placed debt securities are in standard denomination of Rs.10 Lakhs, such disclosures may be made only through web sites of the stock exchange where the debt securities are sought to be listed.

1.2.           The debt securities shall carry a credit rating of not less than investment grade from a Credit Rating Agency registered with the Board.

1.3.           The company shall appoint a debenture trustee registered with SEBI in respect of the issue of the debt securities.

1.4.           The debt securities shall be issued and traded in demat form.

1.5.           The company shall sign a separate listing agreement with the exchange in respect of debt securities and comply with the conditions of listing.

1.6.           All trades with the exception of spot transactions, in a listed debt security, shall be executed only on the trading platform of a stock exchange.

1.7.           The trading in privately placed debts shall only take place between Qualified Institutional Investors (QIBs) and High Networth Individuals (HNIs), in standard denomination of Rs.10 lakhs.

1.8.           The requirement of Rule 19(2)(b) of the Securities Contract (Regulation) Rules, 1957 will not be applicable to listing of privately placed debt securities on exchanges, provided all the above requirements are complied with.

1.9.           If the intermediaries registered with SEBI associate themselves with the issuance of private placement of unlisted debt securities, they will be held accountable for such issues. They will also be required to furnish periodical reports to SEBI in such format as may be decided by SEBI.

2.      The stock exchanges are directed to:

2.1       make necessary amendments to the listing agreement, bye-laws, rules and regulations for the implementation of the above decision immediately, as may be applicable.

2.2       bring the provisions of this circular to the notice of the listed companies/member brokers/clearing members of the Exchange and also to disseminate the same on the website for easy access to the investors; and

2.3       communicate to SEBI, the status of the implementation of the provisions of this circular in Section II, item no. 13 of the Monthly Development Report for the month of October 2003.

3.      This circular is being issued in exercise of powers conferred by section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with section 10 of the Securities Contracts (Regulation) Act 1956, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

Yours faithfully,







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