Mumbai, Aug 15: In a move to keep off fly-by-night operators, the Securities and Exchange Board of India on Thursday tightened its disclosure and investor protection (DIP) guidelines, making it necessary for companies to have minimum net tangible assets of Rs 3 crore to raise funds through public issues. The existing eligibility norms for issuers have been amended to help small and medium companies to tap the primary market without exposing the public to undue risk, Sebi said in a release on Thursday.

"The amended norms are expected to improve quality of issuer companies and also to keep fly-by-night issuers at bay", the release said.

On price discovery through book building, Sebi said companies could indicate a movable price band or a fixed floor price to make it realistic and immune from artificial demand.
Similarly, Sebi has made a provision for green shoe option, an arrangement for allocating shares in excess of the shares included in the public issue. Bureau Report