A special call-auction mechanism without price band may be enabled for listed ICs and listed IHCs, whose shares are trading beyond a certain discount to their book value, for efficient price discovery.
The ICs or IHCs may be identified based on the existing industry classification.
The scrip of such ICs or IHCs should have been listed and available for trading at least for a period of 1 year and the company should have been compliant with all the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 including submission of audited financial results.
Total assets of the company invested in shares of other listed companies may be at least 50 percent. In case you do not agree with the proposed threshold, please provide your comments for the following options such as 25 percent and above or 70 percent and above or 90 percent and above
The 6 month VWAP of the security may be less than 50 percent of the book value of such companies or
The 6 month VWAP of the security may be less than 50 percent of the book value of such company based on pro-rata of their investments in shares of other listed companies. Please indicate the option which you feel is more appropriate.
The stock exchanges shall initiate the process for special call-auction without price band for shares of such companies with a 7 day prior notice.
The detailed information including the latest available overall book value of the company, book value based on the investments in shares of other listed companies, investments in other listed companies, last traded price, etc. to be disclosed by the stock exchanges on their websites and appropriately bring to the notice of the investors.
The special call-auction session may be treated successful i.e. the discovered price shall be treated as new price only if at least 5 PAN based unique buyers and sellers have participated in the call-auction session.
If call auction is not a success on day 1, it will continue on the next day and till such time the price is discovered.
Other aspects such as duration of the call-auction session, risk management, equilibrium price, etc. of the special call-auction may be same as applicable for pre-open call-auction in case of IPO and relisted shares.
The special call-auction mechanism may be provided for the ICs or IHCs only once in a year.
With reference to the proposal at 2(d) above, please suggest whether the 6 month VWAP is appropriate or the same can be replaced either with 3 month of 1 year VWAP. Further, you may also suggest whether the 50 percent threshold for the VWAP as given above is appropriate or a different threshold of either 25 percent and above or 75 percent and above may be considered.
Stock Exchanges shall co-ordinate amongst themselves and provide the special call-auction mechanism for such companies.
Any other suggestion to improve the price discovery of ICs or IHCs