SEBI has issued a consultation paper proposing changes to the mechanism for determining open offer price with respect to disinvestment of public sector undertakings. As per the said paper, the move is aimed at relaxing certain provisions, including doing away with the requirement of taking into account 60 days' volume-weighted average market price for calculating the offer price.

Noting that strategic disinvestment of PSUs is at variance with privately executed agreements, SEBI in the consultation paper said the announcement of private transactions is made only upon execution of binding agreements and thus there is not much impact on the traded price of such target companies. While in the case of PSUs' strategic disinvestment, information comes in the public domain at the time of Cabinet approval and subsequent announcements are also made at different stages and thus the market price of the PSU concerned gets highly susceptible to such developments.

Comments from the public have been sought on the consultation paper till April 15.

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