Daijiworld Media Network – New Delhi

New Delhi, Aug 1: In a move aimed at enhancing market flexibility, the Securities and Exchange Board of India (SEBI) on Friday proposed allowing zero-coupon debt securities and non-convertible redeemable preference shares (NCRPS) to be issued at a reduced face value of Rs 10,000.

Currently, only interest or dividend-paying instruments qualify for such lower denomination issuance, leaving out zero-coupon and zero-dividend options. Responding to market feedback, SEBI has now proposed changes that would permit both regular payout and zero-interest securities at the lower face value, provided they have a fixed maturity and no structured obligations.

The proposed relaxation, outlined in a consultation paper, would apply to all privately placed debt securities and NCRPS intended for listing on stock exchanges.

SEBI has issued a draft circular and invited public feedback on the proposal until August 21. Meanwhile, exchanges, depositories, and clearing corporations have been directed to prepare their systems for the potential revision.