New Delhi, March 19 :    New Delhi, March 19:  The Securities and Exchange Board of India (Sebi) today abolished the par value concept of shares and gave the companies the freedom to fix the offer price for their shares with the rider that they should not be issued in decimal of a rupee. The capital market watchdog also relaxed entry norms for initial public offerings (IPOs) to activate the primary market which has been in the doldrums for quiet some time now. Significantly, the board has also amended the buyback regulations. From now on, companies can buy back specified securities listed on a recognised stock exchange in addition to equity shares in listed companies. The move will lead to companies being eligible to buy back debentures, preference shares and warrants. It will enable companies that have intrinsic share values far below the par value of Rs 10 or Rs 100 to tap the market. Existing companies which have already issued shares at Rs 10 and Rs 100 will also be allowed to take advantage of the new facility to reduce the face value below Rs 10 by splitting the existing shares. Sebi chairman D.R. Mehta said if a company wanted to issue shares below Rs 10, then the issue will have to be in the dematerialised form. The board has also decided that by adopting this, Sebi will fully implement the free pricing mechanism. Amending the entry norms for IPOs, Sebi said companies which have the ability to pay dividend for three years out of five years will be eligible to tap the primary market. Earlier, only companies that had paid dividend were allowed to tap the market. However, companies intending to come out with an IPO must have a pre-issue net worth of not less than Rs 1 crore for the preceding two years or three out of the last five years, it said. Sebi also came out with a set of norms for employee stock option schemes (ESOPs) and employee stock purchase plans freeing companies from restrictions on offering any number of shares to a single employee. However, in case the offer is over one per cent of the total shares, a specific disclosure and approval will be necessary in the AGM. In a bid to encourage derivatives trading, Sebi today allowed mutual funds also to trade in these instruments for the purpose of hedging and portfolio balancing. The board also accepted the recommendations of J.R Verma on risk containment measures in derivatives trading which has prescribed that the liquid net worth shall not be less than Rs 50 lakh. The draft regulations on credit rating agencies has also been approved. The promoters of the credit rating agencies can include FIs, banks, foreign credit rating agencies and any corporate with a floor net worth of Rs 100 crore during the previous five years. The holding of a bank or an FI in these agencies has been capped at 5 per cent. If it exceeds this level at present, it will have to brought down within three years. Sebi has also allowed merchant bankers who have received in-principle approval from the Reserve Bank to be primary dealers.