Sai Silks gets Sebi nod to float IPO; eyes to raise up to Rs 1,200-crore Ethnic apparel retailer Sai Silks (Kalamandir) Limited has received capital markets regulator Sebi’s go ahead to raise as much as Rs 1,200 crore through an initial public offering (IPO).The IPO comprises fresh issue of equity shares worth Rs 600 crore and an offer-for-sale of up to 18,048,440 equity shares by promoters and promoter group entities, according to the draft red herring prospectus (DRHP). The company, which filed preliminary IPO papers with the markets watchdog in July, obtained its observation letter on November 7, an update with the Securities and Exchange Board of India (Sebi) showed on Tuesday. In Sebi’s parlance, obtaining its observation letter implies a go ahead to float an IPO. The net proceeds of the fresh issue will be used for setting-up of 25 new stores, two warehouses, to support working capital requirements, payment of debt and for general corporate purposes. As per market sources, the issue size is expected to be Rs 1,200 crore. Motilal Oswal Investment Advisors, Edelweiss Financial Services and HDFC Bank are the book-running lead managers to the issue. The equity shares are proposed to be listed on BSE and National Stock Exchange (India) Limited. Through its four store formats — Kalamandir, VaraMahalakshmi Silks, Mandir, and KLM Fashion Mall — Sai Silks offers products to various segments of the market that include premium ethnic fashion, ethnic fashion for middle income and value fashion. Also read| Unicorn startup Darwinbox may go for IPO in next 3 years: Co-founder The company currently operates 50 stores in four major south Indian states — Andhra Pradesh, Telangana, Karnataka and Tamil Nadu.Meanwhile, one more company, KFin Technologies, has secured Sebi’s approval to float an IPO.Financial services platform KFin Technologies had filed preliminary IPO papers with Sebi on March 31, and obtained its letter on November 7.Going by draft papers, the Rs 2,400-crore IPO is entirely an offer-for-sale by promoter General Atlantic Singapore Fund Pte. Ltd. The company will not receive any proceeds from the offer as all of it will go to the promoter selling shareholder.KFin is majority owned by funds managed by General Atlantic, a leading global private equity investor, which holds a 74.94 per cent stake in the company. Last year, Kotak Mahindra Bank had acquired a 9.98 per cent stake in the company.
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In its consultation paper, Sebi has suggested that trustees of mutual funds should focus on market abuse by AMC, its employees and mis-selling by the AMC to increase the asset base.
Also, trustees should be responsible for fairness of fees and expenses charged by the AMC, compare its performance with peers and ensure that AMC’s sponsor is not getting any undue advantage.
In addition to the core areas, the trustees should be responsible for periodically reviewing the steps taken by AMCs for the folios which do not contain all KYC attributes with bank details.
Further, Sebi has suggested that trustees and their resource persons should independently evaluate the extent of compliance by AMC and not merely rely on AMC’s assurances.
To facilitate trustees’ supervision, AMCs should provide them with analytical information.
Presently, the trustees primarily rely on the AMCs for ensuring compliance with the applicable rules.
Under the rules, trustees hold the property of the mutual fund in trust for the benefit of the unitholders. The trustees appoint an AMC to float schemes for the mutual fund and manage the funds mobilised under various schemes, in accordance with the investment objectives.
“In view of the increasing scale and reach of the mutual fund industry, trustees’ role in respect of unitholders’ protection assumes even greater significance,” Sebi said on Friday.
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Over the past decade there has been a five-fold increase in the size of the mutual fund industry. The assets under management (AUM) has surged from Rs 7.93 lakh crore in November 2012 to Rs 39.89 lakh crore in December 2022.
To ensure that trustees devote time and attention to their core responsibilities, Sebi has suggested that for fulfilling other responsibilities, trustees may rely on professional firms such as audit firms, legal firms, merchant bankers for carrying out due diligence on their behalf.
The Sebi also listed some duties trustees can delegate to AMCs. This include ensuring that all systems are in place prior to the launch of any scheme by the AMC, and calculating any income in the mutual fund due to the fund and any income received in the mutual fund for unitholders.
The regulator has proposed to provide a one year time to existing trustees with board of trustee structure to convert into a trustee company, from governance point of view.
Presently, two structures for trustees are permitted — corporate and board of trustees structure. Moreover, there are a few mutual funds which have the board of trustees structure while the trustees of all other mutual funds have adopted the structure of a trustee company.
Considering the enhanced role of trustees over the period of time, Sebi has suggested to increase the minimum number of trustees to adequately perform their functions. Presently, the minimum number of trustees prescribed is four.
Also, it has been proposed that the chairperson of the trustee company should be an independent director.
Sebi has suggested that apart from the meeting of the audit committee of AMCs and trustees (which mostly comprises of independent directors), the board of AMCs and the board of trustees may be mandated to meet at least once a year to discuss the issues concerning the mutual funds.
The regulator proposed that the existing MF Regulations on AMC and its obligations may be amended to include additional clauses with respect to the obligations of the board of AMC.
The proposed amendment may include a clause which casts an obligation on the board of AMC to ensure that all the activities of the asset management company are in accordance with the provisions of these regulations.
The Securities and Exchange Board of India (Sebi) has sought comments from public till February 24 on these proposals.