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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (9992)	12/10/1999 3:43:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

India May Ease Net IPO Regulations By Uday Lal Pai India Correspondent, asia.internet.com [December 10, 1999--MUMBAI] The stringent regulations required to tap the capital market may be relaxed for IPOs floated by Indian Net companies, says D R Mehta, chairman of the Securities and Exchange Board of India. IT companies in the Internet sector may soon be allowed to float an IPO without having to report profits for three consecutive years. SEBI had earlier fixed minimum capitalization and 3-year profitability norms for companies planning IPOs. The National Association of Software and Services Companies (Nasscom) has suggested that SEBI relax its norms and do away with the mandatory 3-year profitability norms for companies related to Internet and e-commerce. Nasscom has argued that global trends indicate that it is not appropriate for an Internet company to wait for three consecutive years of profit before going public. Industry analysts have said that several Indian companies are looking at the US market because they cannot list under existing norms in India. "For Internet companies, investors are looking at future growth and profitability and many times it is difficult to realize the true valuation for an Internet firm before a public float", said Nasscom president Dewang Mehta. Mehta pointed out that the business model of Net ventures make it difficult to establish a profitability track record in three years. ?Thus, a mandatory criterion in this regard may be a major dampener to quality companies approaching public markets", he said. However, SEBI partially relaxed the listing norms for IT companies a few months ago to allow them to sell only 10 percent of their capital during the IPO against 25 percent for non-IT companies. An official notification easing norms for Net IPOs is expected soon.