Latest news with #SCRR
Time of India
27-06-2025
- Business
- Time of India
Credila Financial Services files draft papers for Rs 5,000 crore IPO with Sebi
Credila Financial Services , an education finance company, has filed a UDRHP-I with SEBI to raise Rs 5,000 crore through an IPO. The company specializes in education loans for students pursuing higher studies in India and abroad. The total issue size aggregating up to Rs 5,000 crore comprises a fresh issue of equity shares aggregating up to Rs 3,000 crore and an offer for sale of equity shares aggregating up to Rs 2,000 crore of face value of Rs 10 per equity share. Also Read | JioBlackRock Broking receives SEBI approval to commence brokerage business The offer for sale of equity shares aggregating up to Rs 2,000 crore (face value of Rs 10 each) comprises up to Rs 950 crore by Kopvoorn B.V. ('Promoter Selling Shareholder') and up to Rs 1,050 crore by HDFC Bank Limited ('Other Selling Shareholder'). Live Events A pre-IPO placement of the specified securities may be undertaken by the company, in consultation with the BRLMs, prior to the filing of the Red Herring Prospectus with the ROC for an aggregate amount not exceeding Rs 600 crore ('Pre-IPO Placement'). The Pre-IPO Placement, if undertaken, will be at a price to be decided by the company in consultation with the BRLMs. If the Pre-IPO Placement is undertaken, the amount raised from the Pre-IPO Placement will be reduced from the fresh issue, subject to the offer complying with rule 19(2)(B) of the Securities Contracts (Regulation) rules, 1957, as amended ('SCRR'). The Pre-IPO Placement, if undertaken, shall not exceed 20% of the fresh issue. Axis Capital Limited , Citigroup Global Markets India Private Limited, Goldman Sachs (India) Securities Private Limited, IIFL Capital Services Limited ( formerly known as IIFL Securities Limited ) and Jefferies India Private Limited are the Book Running Lead Managers to the issue. The Company proposes to utilise the net proceeds towards augmenting the capital base to meet the Company's future capital requirements arising out of the growth of its business and assets. Credila Financial Services Limited is the second fastest growing education-focused NBFC in India in terms of year-on-year growth of Net Loans, with a year-on-year growth of 47.67% between the Financial Years 2024 and 2025. Also Read | Wakefit Innovations files DRHP with SEBI, plans to raise Rs 468 crore via fresh issue The company is the largest education-focused non-banking financial company in India (which peer set comprises three companies, including Credila), with Net Loans of Rs 41,469 crore as of March 31, 2025; restated net profit after tax of Rs 990 crore for the Financial Year 2025; and the highest disbursements of Rs 14,089 crore for the Financial Year 2024 (assessment performed for Financial Year 2024 given unavailability of peer data for Financial Year 2025). The company is the fastest growing education-focused NBFC in India (comprising three companies, including including Credila) with a CAGR of 64.96% in Net Loans between the Financial Years 2023 and 2025 and a year-on-year growth of 84.26% in assets under management between March 31, 2023 and March 31, 2024 (assessment performed for Financial Year 2024 given unavailability of peer data for Financial Year 2025).
Time of India
08-06-2025
- Business
- Time of India
Explained: How new rule tweak frees up stock brokers to invest beyond securities
Live Events In a welcome step for the broking industry, the government has amended Rule 8 of the Securities Contracts (Regulation) Rules, 1957 ( SCRR ), providing long-awaited clarity on what does not constitute 'business' for a stockbroker. The amendment addresses a long-standing industry concern around regulatory restrictions that limited brokers from investing their own surplus funds in non-securities 8 of the SCRR lays down the eligibility conditions for a person to act as a stockbroker or a member of a recognised stock exchange . Under sub-rules (1)(f) and (3)(f), brokers are prohibited from engaging in any business other than that of securities, unless such business is carried out without any personal financial liability. This essentially prevented brokers from exposing themselves to financial risks unrelated to their core broking time, the National Stock Exchange and the Bombay Stock Exchange issued circulars that significantly widened the interpretation of 'business' under Rule 8 of the SCRR. These circulars clarified that even passive investments in group companies (subsidiary or associate) engaged in non-securities businesses (such as NBFCs, real estate or insurance) would be treated as 'business' and would be in violation of Rule 8. This interpretation created a regulatory overhang that discouraged brokers from investing their own profits outside the securities practice, brokers were restricted from investing their retained earnings or surplus capital into group ventures operating outside the securities domain, even where such investments posed no financial risk to the broker or its clients. This created a significant operational constraint. If a broker wished to invest in a non-securities business, it first had to route profits to its parent, typically via dividends or buybacks, incurring additional tax liabilities before the funds could be redeployed by the parent. This structure was inefficient and deterred brokers from pursuing legitimate investment opportunities that could enhance their business offerings and these industry concerns, the Ministry of Finance released a consultation paper in September 2024 proposing a more nuanced interpretation of Rule 8. It clarified that the original intent of the restriction was to protect client interests and ensure the financial soundness of the brokers, not to place undue limitations on the use of their own capital. Since stockbrokers are already subject to stringent SEBI regulations aimed at safeguarding client funds, further restricting them from investing in group companies engaged in non-securities businesses under the guise of protecting client funds seemed excessive and position has now been codified through an amendment to Rule 8. It now clarifies that a broker's investment activity will not be treated as 'business', unless it involves client funds, client securities or creates a financial obligation for the broker. This empowers brokers to freely invest their retained earnings and surplus capital in group companies or unrelated ventures, so long as client interests remain unaffected. Brokers can now participate in broader financial services ecosystems such as lending or insurance through subsidiaries, allowing them to diversify revenue streams and build integrated financial this amendment to Rule 8 is now effective and offers much-needed regulatory clarity, it is worth noting that the circulars issued by NSE and BSE interpreting the earlier position have not yet been formally withdrawn. This could create some ambiguity for brokers on how the exchanges will align with the amended Rule 8, particularly given that the validity of the NSE circular had been challenged before the Bombay High Court. Until the exchanges formally update their stance, brokers may continue to face uncertainty in practice despite the regulatory intent to liberalise.(The authors Prashanth Ramdas is Partner and Shivaang Maheshwari is Associate at Khaitan & Co. The views expressed are personal.)
Economic Times
08-06-2025
- Business
- Economic Times
Explained: How new rule tweak frees up stock brokers to invest beyond securities
Government eases investment rules for stockbrokers. Amendment to Securities Contracts Regulation Rules gives clarity. Brokers can now invest surplus funds more freely. Earlier rules restricted investments in non-securities businesses. New rules allow investments unless client funds are involved. This empowers brokers to diversify revenue streams. However, exchange circulars need updating for full clarity. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads In a welcome step for the broking industry, the government has amended Rule 8 of the Securities Contracts (Regulation) Rules, 1957 ( SCRR ), providing long-awaited clarity on what does not constitute 'business' for a stockbroker. The amendment addresses a long-standing industry concern around regulatory restrictions that limited brokers from investing their own surplus funds in non-securities 8 of the SCRR lays down the eligibility conditions for a person to act as a stockbroker or a member of a recognised stock exchange . Under sub-rules (1)(f) and (3)(f), brokers are prohibited from engaging in any business other than that of securities, unless such business is carried out without any personal financial liability. This essentially prevented brokers from exposing themselves to financial risks unrelated to their core broking time, the National Stock Exchange and the Bombay Stock Exchange issued circulars that significantly widened the interpretation of 'business' under Rule 8 of the SCRR. These circulars clarified that even passive investments in group companies (subsidiary or associate) engaged in non-securities businesses (such as NBFCs, real estate or insurance) would be treated as 'business' and would be in violation of Rule 8. This interpretation created a regulatory overhang that discouraged brokers from investing their own profits outside the securities practice, brokers were restricted from investing their retained earnings or surplus capital into group ventures operating outside the securities domain, even where such investments posed no financial risk to the broker or its clients. This created a significant operational constraint. If a broker wished to invest in a non-securities business, it first had to route profits to its parent, typically via dividends or buybacks, incurring additional tax liabilities before the funds could be redeployed by the parent. This structure was inefficient and deterred brokers from pursuing legitimate investment opportunities that could enhance their business offerings and these industry concerns, the Ministry of Finance released a consultation paper in September 2024 proposing a more nuanced interpretation of Rule 8. It clarified that the original intent of the restriction was to protect client interests and ensure the financial soundness of the brokers, not to place undue limitations on the use of their own capital. Since stockbrokers are already subject to stringent SEBI regulations aimed at safeguarding client funds, further restricting them from investing in group companies engaged in non-securities businesses under the guise of protecting client funds seemed excessive and position has now been codified through an amendment to Rule 8. It now clarifies that a broker's investment activity will not be treated as 'business', unless it involves client funds, client securities or creates a financial obligation for the broker. This empowers brokers to freely invest their retained earnings and surplus capital in group companies or unrelated ventures, so long as client interests remain unaffected. Brokers can now participate in broader financial services ecosystems such as lending or insurance through subsidiaries, allowing them to diversify revenue streams and build integrated financial this amendment to Rule 8 is now effective and offers much-needed regulatory clarity, it is worth noting that the circulars issued by NSE and BSE interpreting the earlier position have not yet been formally withdrawn. This could create some ambiguity for brokers on how the exchanges will align with the amended Rule 8, particularly given that the validity of the NSE circular had been challenged before the Bombay High Court. Until the exchanges formally update their stance, brokers may continue to face uncertainty in practice despite the regulatory intent to liberalise.(The authors Prashanth Ramdas is Partner and Shivaang Maheshwari is Associate at Khaitan & Co. The views expressed are personal.)
Business Standard
20-05-2025
- Business
- Business Standard
Amendment in Securities Contracts Rules to offer regulatory clarity to enhance ease of doing business for brokers
The Department of Economic Affairs (DEA), Ministry of Finance, amended Rule 8 of the Securities Contracts (Regulation) Rules (SCRR), 1957. The amendment gives regulatory clarity to enhance ease of doing business for brokers. After taking note of the concerns raised by various stakeholders over certain provisions in the said Rules, the DEA had released a Consultation Paper in September, 2024, inviting stakeholder comments. Given the growth in the scale and interconnectedness of the financial sector and the evolution of nature of business of brokers with time, the DEA felt it necessary to review the appropriateness of safeguards embedded in the Rules so that the intent of the Rules is served without constraining activities of the stakeholders. The amendment has been carried out after due consideration of feedback from the stakeholder and is part of the broader emphasis of the Government to provide regulatory clarity and enhance ease of doing business in the financial sector. It will ensure that market intermediaries continue to support the development of India's capital markets in a transparent and well-regulated manner.
Time of India
19-05-2025
- Business
- Time of India
Brokers can now set up arms, invest in new business
M UMBAI: The govt on Monday amended the Securities Contracts (Regulation) Rule, which will now allow brokers to use their own funds to invest in businesses outside their own area. However, they will not be allowed to use clients' funds to invest in those businesses. They will also not be allowed to borrow funds to invest in other businesses. Brokers said they will now wait for Sebi's rules on the same. Till now, brokers were not allowed to float subsidiaries. The changed rules will allow that, top officials at broking houses said. "Given the growth in the scale and interconnectedness of the financial sector and the evolution of the nature of business of brokers with time, the DEA (Dept of Economic Affairs) felt it necessary to review the appropriateness of safeguards embedded in the rules so that the intent of the rules is served without constraining activities of the stakeholders," the govt said through a release on Monday. Broking house officials feel this amendment to SCRR is an important shift in regulatory approach. Till now, stock brokers were not allowed to make investments in any business other than securities and commodity derivatives, said leading broker Motilal Oswal. "This amendment would now allow stock brokers to make investments in any type of business, provided it is not out of client funds or client securities and also it should not create financial liability on the broker. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 수천시간을 투자해서 만든 이미지영어 40분 특강 스티븐영어 지금 시작하기 Undo " This change also opens avenues for brokers to make strategic investments. "Stockbrokers have always been allowed to use their own funds for day-to-day operations within the securities and commodities business. This change potentially allows for strategic investments outside these core areas, offering greater capital flexibility," said Pranav Haridasan, MD and CEO, Axis Securities. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
