(IE)
Markets regulator Securities and Exchange Board of India (SEBI) proposed to lay a framework for price discovery of shares of listed investment companies (ICs) and listed investment holding companies (IHCs) whose market price is at significant discount to their book value.
ICs are companies that earn major revenue from interest, capital appreciation from investments made, and do not include rental income which is classified under diversified commercial services. IHCs are holding companies with holding of 51 per cent or more in other company. In the draft norms, SEBI said a special call-auction mechanism without price band may be enabled for listed ICs and IHCs, whose shares are trading beyond a certain discount to their book value.
For this, stock exchanges will co-ordinate amongst themselves and provide the special call-auction mechanism for such companies, it recommended. The concept of price bands had been put in place as a risk management and surveillance measure for ensuring orderly trading, appropriate price discovery and promote market integrity.
