General Manager
Corporation Finance Department
Division of Issues and Listing I
((Direct) : 26449350
Email : neelamb@sebi.gov.in
CFD/DIL/SM/99942/2007
July 31, 2007
Grabal Alok Impex Limited
Peninsula Towers
Peninsula Corporate Park
G.K. Marg
Lower Parel
Mumbai- 400 013
Dear Sir,
Re : Your request for interpretive letter under SEBI (Informal Guidance) Scheme, 2003
1.0 Please refer to your letter dated June 20, 2007 seeking interpretive letter under the SEBI (Informal Guidance) Scheme, 2003.
2.0 In your letter under reference, you have inter alia represented as follows:
a. The share of Grabal Alok Impex Limited (GAIL) are listed on the Pune Stock Exchange and Ahmedabad Stock Exchange with effect from July 1998. Further, the equity shares of GAIL have also been admitted to trading on the Bombay Stock Exchange (BSE) as ‘permitted securities category” with effect from 8th January, 2003.
b.It is also noted that GAIL proposes to come out with a Qualified Institutions’ Placement(QIP) in the near future. However, the shares of GAIL are not listed on BSE.
3.0 You have requested the following clarifications from SEBI on Clause 13A.1.1. of the DIP Guidelines:
a. Whether GAIL is eligible to make a QIP as on date considering the fact, that its securities are dealt on BSE for over a period of one year under the permitted securities category.
4.0 Without necessarily agreeing with your analysis, our views on the above issue are as under-
i. Clause 13.A.1.1. of the DIP Guidelines reads as follows:-
‘This Chapter shall apply to any issue of equity sharers/Fully Convertible Debentures (FCDs)/Partly Converible Debentures (PCDs) or any securities other than warrants, which are convertible into or exchangeable with equity shares at a later date(hereinafter referred to as ‘specified securities’) made to Qualified Institutional Buyers (QIBs) pursuant to this chapter, by a listed company which fulfils the following conditions:
(a) its equity shares of the same class were listed on a stock exchange having nation wide terminals for a period of at least one year as on date of issuance of notice to the shareholders for convening the meeting referred to in Explanation(a) to clause 13A.3.1; and …………’.
(b) it is in compliance with the prescribed minimum public shareholding requirements of the listing agreement.’
ii. As per the above Clause read with Explanation (a) to Clause 13A.3.1 of the DIP Guidelines, a company desirous of issuing its equity shares to Qualified Institutional Buyers may do so provided its equity shares of the same class are listed on a stock exchange having nation wide terminals, for a period of at least one year as on the date of issuance of notice to its shareholders for convening the meeting in terms of Section 81(1A) of the Companies Act, 1956 (‘Section 81(1A).
iii. Cases where the shares of a listed company are permitted to trading but are not listed with an exchange with nation wide trading terminals for a period of more than one year as on the date of issuance of notice for a meeting in terms of section 81(1A), do not satisfy the requirement stipulated in Clause 13A.1.1. of the DIP Guidelines.
iv. In view of the above, in your case, if the GAIL’s equity shares of the same classs as the shares which are to be issued vide the proposed QIP are not listed on a stock exchange having nation wide terminals for a period of more than one year as on the date of issuance of notice for a meeting in terms of Section 81(1A), GAIL will not satisfy the requisite eligibility criteria to make a QIP as provided in Chapter XIII-A of the DIP Guidelines.
5.0 This position is based on the representation made to the division in your aforesaid letter under reference. Different facts or condition might require different results. This letter does not express a decision of the Board on the question referred.
6.0 Please note that the above views are expressed only with respect to the clarifications sought on the applicability of the respective Regulations/Guidelines as referred above and does not affect the applicability of any other law or requirements.
Yours faithfully,
Neelam Bhardwaj