Sebi eases norms on name changes for listed companies

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Sebi eases norms on name changes for listed companies
The Securities Exchange Board of India or the SEBI has relaxed the norms for listed companies that wish to change their names. The earlier regulation required all the listed companies to have 50 percent of their total revenue from the new business activity for a period of one year before the name could be altered.

But, the SEBI on Thursday announced that if the investment by these companies in the assets of the new business is at least 50percent, then they can alter their names. This would mostly benefit those companies which have a long payback period on their investments.

According to the new provisions, the term “advances" will include only the payments made to contractors and suppliers by these companies to carry out these new projects .These new advances must specifically relate to the business activity.

SEBI also said that if a company which is undergoing the process of a business set-up and has made significant investments in it can still alter its name.

Companies mostly change their names when their strategic area of focus shifts to a new activity or process. But some companies also change their names to attract investors in the stock market. During the dotcom boom in 2000, some companies added Tech to their names when the IT sector was booming.

In 2008,more than 50 companies changed their names. Some of the companies that have changed their names are Simplex Infrastructures (from Simplex Concrete Piles), Simplex Realty (Simplex Mills), Entegra Infrastructures (Induj Enertech), Satra Properties India (Express Leasing), Kanika Infrastructure & Power (Kanika Infocom Global) and Brahmaputra Infraproject (formerly Mewar Industries).

Read more about: sebi, bse, nse
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