The Securities and Exchange Board of India (Sebi) has decided to relax the pricing methodology for preferential issues by listed firms having stressed assets even as it also exempted allottees of preferential issues from open offer obligations in these cases with immediate effect.

The announcement comes ahead of the Sebi board meet on June 25.

Listed companies having ‘stressed assets’ generally witness a fall in their share price and they also face various difficulties in raising capital through the conventional means. The market regulator, therefore, eased the pricing methodology of preferential issues by such firms.

The new framework is aimed at helping stressed companies raise capital through timely financial intervention and at the same time protecting the interest of shareholders.

“Eligible listed companies having stressed assets will be able to determine pricing of their preferential allotments at not less than the average of the weekly high and low of the volume weighted average prices of the related equity shares during the two weeks preceding the relevant date,” Sebi said in a statement on Tuesday.

At present, the determination of the pricing covers a period of 26 weeks or more for frequently traded shares.

Sebi said allottees of preferential issue in such eligible companies will be exempted from making an open offer if the acquisition is beyond the prescribed threshold or if the open offer is warranted due to change in control in terms of Sebi takeover regulations.

Defaulted debt securities

Sebi on Tuesday allowed transactions in defaulted debt securities and put in place operational framework for such transactions.

This comes after the regulator received representations from market participants and investors to allow transactions in debt securities where the redemption amount has not been paid on maturity or redemption date.