SEBI’s Proposed Framework for Undervalued Companies

The Securities and Exchange Board of India (SEBI) has proposed a new framework designed to improve the price discovery process for shares of listed Investment Companies (ICs) and Investment Holding Companies (IHCs) that are trading at a significant discount to their book value. This proposal includes a special call-auction mechanism that operates without price bands, intended to take place annually for eligible companies. This move aims to address issues such as liquidity and fair price discovery, which are currently hindered by significant variances between market and book values.