SEBI revises payment process for IPOs, rights issue

MUMBAI (Reuters) - India's market regulator has changed the payment process for subscribing to initial public offers and rights issues.

Under the new process, the application money will remain in the bank account of the applicant till allotment is finalised, the Securities and Exchange Board of India (SEBI) said in a statement after its board meeting late on Tuesday.

Currently, the money is debited from the bank account, and based on the number of shares allotted the excess money is returned. The regulator said the new system would eliminate the refund process.

The modalities of the entire process will be worked out separately, it said.

The SEBI board also increased the minimum net worth requirement for registration as a portfolio manager to 20 million rupees from 5 million rupees.

It said existing portfolio managers with lower net worth will have to increase it to at least 10 million rupees within six months, and to the new prescribed limit in the next six months.

SEBI said portfolio managers will not be allowed to pool the resources of clients like mutual funds and must keep assets of each client separately.

Portfolio managers working on pooled basis have been given six months to convert their operations to individual basis, the statement said.