On 3-3-2025, the Securities and Exchange Board of India notified the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2025 to amend the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018. The provisions came on 4-3-2025.
Key Points:
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In connection with Regulation 8-A relating to “Additional conditions for an offer for sale for issues under sub-regulation (2) of Regulation 6” which relates to “Eligibility requirements for an initial public offering”, these regulations have clarified that the limits mentioned in Regulation 8-A will be calculated with reference to shareholding as on the date of filing of the draft offer document and will apply cumulatively to the total number of shares offered for sale to the public and any secondary sale transactions prior to the issue.
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According to Regulation 43 relating to “Issue-related advertisements”, it was mandatory for the issuer to make a pre-issue advertisement in one English national daily newspaper with wide circulation, Hindi national daily newspaper with wide circulation and one regional language newspaper with wide circulation at the place where the registered office of the issuer is situated.
Now, the issuer will have to make a pre-issue and price band advertisement in the same newspapers in which the public announcement was made.
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Regulation 54 relating to “Reporting of transitions of the promoters and promoter group” has been revised.
Earlier, the issuer was supposed to ensure that all transactions in securities by the promoter and promoter group between the date of filing of the draft offer document/offer document and the date of closure of the issue was reported to the stock exchange within 24 hours of such transactions.
Now, along with the above-mentioned mandate, the issuer will also have to ensure that in case any proposed pre-IPO placement is disclosed in the draft offer document, they will have to report back to stock exchange within 24 hours of such pre- IPO transactions.
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Regulation 60 relating to “Reference date” has been revised.
Earlier, an issuer offering specified securities of aggregate value of Rs. 50 crores rupees or more, was required to satisfy the conditions of this Chapter at the time of filing the draft letter of offer with the Securities and Exchange Board of India (‘Board’) and also at the time of filing the final letter of offer with the stock exchanges.
Now, an issuer offering specified securities through a rights issue will have to satisfy the conditions of this Chapter at the time of filing the draft letter of offer with the stock exchange, and at the time of filing the letter of offer with the Board and the stock exchange.
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Regulation 71 relating to “Filing of the draft letter of offer and letter of offer” has been revised:
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mandating that the issuer will have to submit the following to the stock exchange:
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Draft letter of offer;
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In case of individual promoters: Permanent Account Number, bank account number and passport number of its promoters;
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In case the promoter is a body corporate: Permanent Account Number, bank account number, company registration number, and the address of the Registrar of Companies with which the promoter is registered;
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In case of an issue of convertible debt instruments: A due diligence certificate from the debenture trustee.
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Issuer will have to file a letter of offer with the Board for information and dissemination on Board’s website along with fees.
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Regulation 77-B has been inserted which relates to “Allotment to Specific Investors”.
According to this Regulation:
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Specific investor will mean:
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any investor who is eligible to participate in rights issue of the issuer;
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whose name has been disclosed by the issuer in terms of- name of the specific investor(s) (i.e. renounces), name of the promoter(s)/promoter group (i.e. renouncer) and number of rights entitlements renounced, where the promoter(s)/promoter group is renouncing their rights;
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whose name has been disclosed by the issuer in terms of- name of the specific investor/ where the issuer intends to allot any under subscribed portion of rights issue in terms of clause (d) of sub-regulation (2) of regulation 90 of these regulations.
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The application will have to be made on the 1st day of issue opening before 11 A.M.
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The issuer will also have to disclose to the stock exchange if the specific investor has made the application for dissemination on the first day of issue opening by 11:30 A.M. or not.
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Withdrawal of applications will not be permitted.
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Regulation 85 relating to “Opening of the issue” has been revised changing the time for a right issue to be opened from 12 months from the date of issuance of the observations by the Board to time period which can be specified by the Board from time to time.
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A new provision has been inserted in Regulation 95 relating to “Reporting of transactions of the promoters and promoter group and other pre-issue transactions” which mandates that issue will have to ensure that any proposed pre-issue placement disclosed in the draft letter of offer will be reported to the stock exchange, within 24 hours of such pre-issue transactions.
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Regulation 281-A relating to “Post-listing exit opportunity for dissenting shareholders” has been inserted which says that the promoters or shareholders in control of an issuer will have to provide an exit offer to dissenting shareholders in case of change in objects or variation in the terms of contract related to objects referred to in the offer document.
