In a bid to provide a faster and cost-effective method of raising capital by listed companies, market regulator Sebi has decided to introduce fast-track issues by large listed companies with an average free float market capitalisation of Rs 10,000 crore or more.

The proposed fast-track system was recommended by the Primary Market Advisory Committee (PMAC) of the Sebi and will be available to companies which are listed on the BSE or the NSE for at least three years. The Sebi has put conditions to be qualified for the fast track system, including excellent track record in redressing investor grievances, compliant with the listing agreement and promoter group stake in dematerialised form.

It has also stipulated that trading on the stock exchanges should constitute at least 2 per cent of total listed shares during the previous one year and the impact of Auditors qualifications in the audited accounts should not exceed 5 per cent of the net orofit or net loss after tax. “No prosecution proceedings or show-cause notice issued by Sebi should be pending against the company, its promoters or whole-time directors,” it said.

The latest Sebi initiative is expected to cut down the time taken for follow-on issues. According to the Sebi, the stock exchanges should give in-principle approval based on the board resolution/ shareholders’ resolution approving the raising of capital. The prospectus should be prepared by the lead managers as per the provisions of the Companies Act and Sebi guidelines and same should be filed with Sebi and stock exchanges for record purpose.