Changing names by listed firms: Sebi eases norms

Relaxing provisions for change in names by companies, regulator Securities and Exchange Board of India said on Thursday any listed firm seeking to undertake such an exercise can do so provided that the amount invested in new projects associated with change of profile is at least 50 per cent of their assets.

As per the earlier rule, at least 50 per cent of the total revenue of such firms was required to have been from activities associated with the any company's new name for a period of one year preceding the change.

"It is observed from the representations received from few companies and feedback

received from the stock exchanges that the companies, where the gestation period of the business is usually longer and the revenue stream often delayed, find it difficult to comply with the aforesaid provision," Sebi said.

Based on the feedback the Sebi has now added the new provision.

It said the companies can now opt for a change in name provided "the amount invested in the new activity/project (fixed assets + advances + works in progress) is at least 50 per cent of the assets of the company."

However, the 'advances' shall include only those extended to contractors and suppliers towards execution of project, specific to new activity as reflected in the new name, it added.