SEBI proposes review of buyback norms for companies with HFCs as subsidiaries.

By Abhay Harish Shah, Realty Quarter

Regulatory Officer Sebi on Wednesday proposed amendments to the share buyback rules for non-bank financial and housing finance undertakings. A discussion paper was issued to look for proposals concerning the revision of terms and conditions of securities buyback. In relation to the share purchase of companies with Non-Banking Financial Companies (NBFC) and Housing Finance Companies (HFCs) Sebi’s Primary Markets Advisory Committee (PMAC), made some recommendations.
The discussion paper suggested that the 2:1 post-capital debt buy-back ratio, excluding the subsidiary that is regulated and has an AAA rating, should be considered on a consolidated basis.
As stated in the discussion paper, such subsidiaries should not have a debt-to-equity ratio of over 5:1, on an independent basis. SEBI said, “PMAC also suggested that infrastructure companies are not separately regulated and use have better use of money and, therefore, such an exclusion cannot be taken into account for infrastructure companies.”