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๐’๐ฉ๐ž๐œ๐ข๐š๐ฅ ๐‚๐š๐ฅ๐ฅ ๐€๐ฎ๐œ๐ญ๐ข๐จ๐ง๐ฌ ๐Ÿ๐จ๐ซ ๐‹๐ข๐ฌ๐ญ๐ž๐ ๐ˆ๐ง๐ฏ๐ž๐ฌ๐ญ๐ฆ๐ž๐ง๐ญ ๐‚๐จ๐ฆ๐ฉ๐š๐ง๐ข๐ž๐ฌ ๐š๐ง๐ ๐ˆ๐ง๐ฏ๐ž๐ฌ๐ญ๐ฆ๐ž๐ง๐ญ ๐‡๐จ๐ฅ๐๐ข๐ง๐  ๐‚๐จ๐ฆ๐ฉ๐š๐ง๐ข๐ž๐ฌ

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SEBI has recently introduced a new framework for “๐˜ด๐˜ฑ๐˜ฆ๐˜ค๐˜ช๐˜ข๐˜ญ ๐˜ค๐˜ข๐˜ญ๐˜ญ ๐˜ข๐˜ถ๐˜ค๐˜ต๐˜ช๐˜ฐ๐˜ฏ ๐˜ธ๐˜ช๐˜ต๐˜ฉ ๐˜ฏ๐˜ฐ ๐˜ฑ๐˜ณ๐˜ช๐˜ค๐˜ฆ ๐˜ฃ๐˜ข๐˜ฏ๐˜ฅ๐˜ดโ€ for effective price discovery of scrips of investment companies (ICs) and investment holding companies (IHCs). Vide Master Circular dated October 16, 2023 for โ€œ๐˜š๐˜ต๐˜ฐ๐˜ค๐˜ฌ ๐˜Œ๐˜น๐˜ค๐˜ฉ๐˜ข๐˜ฏ๐˜จ๐˜ฆ๐˜ด ๐˜ข๐˜ฏ๐˜ฅ ๐˜Š๐˜ญ๐˜ฆ๐˜ข๐˜ณ๐˜ช๐˜ฏ๐˜จ ๐˜Š๐˜ฐ๐˜ณ๐˜ฑ๐˜ฐ๐˜ณ๐˜ข๐˜ต๐˜ช๐˜ฐ๐˜ฏ๐˜ดโ€, SEBI had prescribed framework for call auction sessionย ย for pre-open sessions; pre-open sessions for IPO & relisted and illiquid scrips.

SEBI has observed that the securities of certain listed ICs and IHCs are traded infrequently and at prices significantly lower than the book value reported in their most recent audited financial statements. These companies typically have minimal day-to-day operations and invest in a variety of asset classes, including the securities of other listed entities. The disparity between the market price and the book value of these ICs and IHCs is negatively impacting liquidity, fair price discovery, and the overall interests of investors in these securities.

Therefore, in order to address the aforesaid concern, SEBI has established strong guidelines for identifying ICs or IHCs eligible for the special call auction as below:

1.ย ย ย ย ๐ˆ๐๐ž๐ง๐ญ๐ข๐Ÿ๐ข๐œ๐š๐ญ๐ข๐จ๐ง ๐‚๐ซ๐ข๐ญ๐ž๐ซ๐ข๐š:ย These companies must be identified based on uniform industry classifications provided by stock exchanges.
2.ย ย ย ย ๐“๐ซ๐š๐๐ข๐ง๐  ๐‘๐ž๐ช๐ฎ๐ข๐ซ๐ž๐ฆ๐ž๐ง๐ญ๐ฌ:ย The scrips must have been listed and available for trading for at least one year and should not be suspended from trading.
3.ย ย ย ย ๐€๐ฌ๐ฌ๐ž๐ญ ๐‚๐จ๐ฆ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง:ย The total assets of the company invested in the scrips of other listed companies must constitute at least 50% of its total assets.
4.ย ย ย ย ๐…๐ซ๐ž๐ช๐ฎ๐ž๐ง๐œ๐ฒ ๐จ๐Ÿ ๐€๐ฎ๐œ๐ญ๐ข๐จ๐ง:ย The special call auction mechanism shall be offered only once a year.
5.ย ย ย ย ๐Œ๐ฎ๐ฅ๐ญ๐ข-๐„๐ฑ๐œ๐ก๐š๐ง๐ ๐ž ๐‹๐ข๐ฌ๐ญ๐ข๐ง๐ :ย If the scrip is listed on multiple stock exchanges and the call auction is successful on any one of them, the price discovered at that stock exchange will serve as the base for trading on the other stock .exchanges.
6. ๐๐จ๐ญ๐ข๐œ๐ž ๐ญ๐จ ๐ฆ๐š๐ซ๐ค๐ž๐ญ: Stock exchanges will announce a special call auction for eligible ICs or IHCs with a 14-day notice to the market which will be published on their websites, detailing last traded price, current overall book value, book value from investments in other listed companies, asset proportion in such investments, and any recent buy-back or delisting offers.

First of such special call auction would be conducted in the month of October 2024 by stock exchanges.

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