SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009
(1) These regulations may be called the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.
(2) They shall come into force on the date of their publication in the Official Gazette.
(1) In these regulations, unless the context otherwise requires:
(a) "Act" means the Securities and Exchange Board of India Act, 1992 (15 of 1992);
(b) "advertisement" includes notices, brochures, pamphlets, show cards, catalogues, hoardings, placards, posters, insertions in newspaper, cover pages of offer documents, pictures and films in any print media or electronic media, radio, television programme;
(c) "anchor investor" means a qualified institutional buyer 3[who makes] an application for a value of ten crore rupees or more in a public issue made through the book building process in accordance with these regulations;
(d) "Application Supported by Blocked Amount (ASBA)" means an application for subscribing to a public issue or rights issue, alon
Unless otherwise provided, these regulations shall apply to the following:
(a) a public issue;
(b) a rights issue, where the aggregate value of specified securities offered is fifty lakh rupees or more;
(c) a preferential issue;
(d) an issue of bonus shares by a listed issuer;
(e) a qualified institutions placement by a listed issuer;
(f) an issue of Indian Depository Receipts 9[:]
10[Provided that the provisions of these regulations shall not apply to issue of securities under clause (b), (d) and (e) of sub-regulation (1) of regulation 9 of Securities and Exchange Board of India (Substantial Acquisition of Shares an
(1) Any issuer offering specified securities through a public issue or rights issue shall satisfy the conditions of this Chapter at the time of filing draft offer document with the Board (unless stated otherwise in this Chapter) and at the time of registering or filing the final offer document with the Registrar of Companies or designated sk exchange, as the case may be.
(2) No issuer shall make a public issue or rights issue of specified securities:
(a) if the issuer, any of its promoters, promoter group or directors or persons in control of the issuer are debarred from accessing the capital market by the Board;
(b) if any of the promoters, directors or persons in control of the issuer was or also is a promoter, director or person in control of any other company which is debarred from accessi
(1) The issuer shall appoint one or more merchant bankers, at least one of whom shall be a lead merchant banker and shall also appoint other intermediaries, in consultation with the lead merchant banker, to carry out the obligations relating to the issue.
(2) The issuer shall, in consultation with the lead merchant banker, appoint only those intermediaries which are registered with the Board.
(3) Where the issue is managed by more than one merchant banker, the rights, obligations and responsibilities, relating inter alia to disclosures, allotment, refund and underwriting obligations, if any, of each merchant banker shall be predetermined and disclosed in the offer document as specified in Schedule I.
(4) The lead merchant banker shall, only after independently assessing the capability of othe
(1) No issuer shall make,
(a) a public issue; or
(b) a rights issue, where the aggregate value of the specified securities offered is fifty lakh rupees or more, unless a draft offer document, along with fees as specified in Schedule IV, has been filed with the Board through the lead merchant banker, at least thirty days prior to registering the prospectus, red herring prospectus or shelf prospectus with the Registrar of Companies or filing the letter of offer with the designated sk exchange, as the case may be.
(2) The Board may specify changes or issue observations, if any, on the draft offer document within thirty days from the later of the following dates:
(a) the date of receipt of the draft offer document under sub-regulation (1); or
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The issuer shall obtain in-principle approval from recognised sk exchanges as follows:
(a) in case of an initial public offer, from all the recognised sk exchanges in which the issuer proposes to get its specified securities listed; and
(b) in case of a further public offer and rights issue:
(i) where the specified securities are listed only on recognised sk exchanges having nationwide trading terminals, from all such sk exchanges;
(ii) where the specified securities are not listed on any recognised sk exchange having nationwide trading terminals, from all the sk exchanges in which the specified securities of the issuer are proposed to be listed;
(iii) where the specified securities are listed on recognis
(1) The lead merchant bankers shall submit the following to the Board along with the draft offer document:
(a) a copy of the agreement entered into between the issuer and the lead merchant bankers;
(b) a copy of inter-se allocation of responsibilities of each merchant banker, in case the issue is managed by more than one merchant banker;
(c) a due diligence certificate as per Form A of Schedule VI;
(d) in case of an issue of convertible debt instruments, a due diligence certificate from the debenture trustee as per Form B of Schedule VI;
8[(e) a certificate confirming compliance of the conditions specified in Part C of Schedule VIII.]
(2) The lead merchant bank
(1) The draft offer document filed with the Board shall be made public, for comments, if any, for a period of at least twenty one days from the date of such filing, by hosting it on the websites of the Board, recognised sk exchanges where specified securities are proposed to be listed and merchant bankers associated with the issue.
(2) The lead merchant bankers shall, after expiry of the period stipulated in sub-regulation (1), file with the Board a statement giving information of the comments received by them or the issuer on the draft offer document during that period and the consequential changes, if any, to be made in the draft offer document.
7[(3) The issuer either on the date of filing the draft offer document with the Board or on the next day shall make a public announcement in one English national daily newspaper with wide circu
(1) Nothing contained in sub-regulations (1), (2) and (3) of regulation 6 and regulations 7 and 8 shall apply to a public issue or rights issue if the issuer satisfies the following conditions:
(a) the equity shares of the issuer have been listed on any recognised sk exchange having nationwide trading terminals for a period of at least three years immediately preceding the reference date;
(b) the average market capitalisation of public shareholding of the issuer is at least 1[five thousand crore rupees];
(c) the annualised trading turnover of the equity shares of the issuer during six calendar months immediately preceding the month of the reference date has been at least two per cent. of the weighted average number of equity shares listed during such six months' period;
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(1) Subject to the compliance with sub-section (4) of section 60 of the Companies Act, 1956, a public issue or rights issue may be opened:
(a) within twelve months from the date of issuance of the observations by the Board under regulation 6; or
(b) within three months of expiry of the period stipulated in sub-regulation (2) of regulation 6, if the Board has not issued observations:
Provided that in case of a fast track issue, the issue shall open within the period stipulated in sub-section (4) of section 60 of the Companies Act, 1956.
(2) In case of shelf prospectus, the first issue may be opened within three months of issuance of observations by the Board.
(3) The issuer shall, before registering the re
The lead merchant bankers shall dispatch the offer document and other issue material including forms for ASBA to the designated sk exchange, syndicate members, underwriters, bankers to the issue, investors' associations and Self Certified Syndicate Banks in advance.
(1) Where the issuer making a public issue (other than through the book building process) or rights issue, desires to have the issue underwritten, it shall appoint the underwriters in accordance with Securities and Exchange Board of India (Underwriters) Regulations, 1993.
(2) Where the issuer makes a public issue through the book building process, such issue shall be underwritten by book runners or syndicate members:
9[Provided that at least fifty per cent. of the net offer to the public proposed to be compulsorily allotted to qualified institutional buyers for the purpose of compliance of the eligibility conditions specified in sub-regulation (2) of regulation 26 and regulation 27, cannot be underwritten.]
(3) The issuer shall enter into underwriting agreement with the book runner, who in tur
(1) The minimum subscription to be received in an issue shall not be less than ninety per cent. of the offer through offer document.
(2) In the event of non-receipt of minimum subscription referred to in sub-regulation (1), all application moneys received shall be refunded to the applicants forthwith, but not later than:
(a) fifteen days of the closure of the issue, in case of a non-underwritten issue; and
(b) seventy days of the closure of the issue, in the case of an underwritten issue where minimum subscription including devolvement obligations paid by the underwriters is not received within sixty days of the closure of the issue.
(3) The offer document shall contain adequate disclosures regarding minimum subscription as specified in Part A of Sc
No allotment shall be made by the issuer in excess of the specified securities offered through the offer document:
Provided that in case of oversubscription, an allotment of not more than ten per cent. of the net offer to public may be made for the purpose of making allotment in minimum lots.
(1) If the issue size exceeds five hundred crore rupees, the issuer shall make arrangements for the use of proceeds of the issue to be monitored by a public financial institution or by one of the scheduled commercial banks named in the offer document as bankers of the issuer:
Provided that nothing contained in this clause shall apply to an offer for sale or an issue of specified securities made by a bank or public financial institution 7[or an insurance company].
(2) The monitoring agency shall submit its report to the issuer in the format specified in Schedule IX on a half yearly basis, till the proceeds of the issue have been fully utilised.
7. Inserted by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2010 vide Notification No. LAD-NRO/GN/2010-11/19/26456 da
If the issuer proposes to receive subscription monies in calls, it shall ensure that the outstanding subscription money is called within twelve months from the date of allotment in the issue and if any applicant fails to pay the call money within the said twelve months, the equity shares on which there are calls in arrear along with the subscription money already paid on such shares shall be forfeited:
Provided that it shall not be necessary to call the outstanding subscription money within twelve months, if the issuer has appointed a monitoring agency in terms of regulation 16.
(1) The issuer and merchant bankers shall ensure that specified securities are allotted and/or application moneys are refunded within fifteen days from the date of closure of the issue.
(2) Where specified securities are not allotted and/or application moneys are not refunded within the period stipulated in sub-regulation (1), the issuer shall undertake to pay interest at such rate and within such time as disclosed in the offer document.
No issuer shall make any further issue of specified securities in any manner whether by way of public issue, rights issue, preferential issue, qualified institutions placement, issue of bonus shares or otherwise:
(a) in case of a fast track issue, during the period between the date of registering the red herring prospectus (in case of a book built issue) or prospectus (in case of a fixed price issue) with the Registrar of Companies or filing the letter of offer with the designated sk exchange and the listing of the specified securities offered through the offer document or refund of application moneys; or
(b) in case of other issues, during the period between the date of filing the draft offer document with the Board and the listing of the specified securities offered through the offer document or refund of application moneys;
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(1) In addition to other requirements laid down in these regulations, an issuer making a public issue or rights issue of convertible debt instruments shall comply with the following conditions:
(a) it has obtained credit rating from one or more credit rating agencies;
(b) it has appointed one or more debenture trustees in accordance with the provisions of section 117B of the Companies Act, 1956 and Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993;
(c) it has created debenture redemption reserve in accordance with the provisions of section 117C of the Companies Act, 1956;
(d) if the issuer proposes to create a charge or security on its assets in respect of secured convertible debt instruments, it shall ensure that:
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(1) The non-convertible portion of partly convertible debt instruments issued by a listed issuer, the value of which exceeds fifty lakh rupees, may be rolled over without change in the interest rate, subject to compliance with the provisions of section 121 of the Companies Act, 1956 and the following conditions:
(a) seventy five per cent. of the holders of the convertible debt instruments of the issuer have, through a resolution, approved the rollover through postal ballot;
(b) the issuer has, along with the notice for passing the resolution, sent to all holders of the convertible debt instruments, an auditors' certificate on the cash flow of the issuer and with comments on the liquidity position of the issuer;
(c) the issuer has undertaken to redeem the non-convertible portion of the partly c
(1) An issuer shall not convert its optionally convertible debt instruments into equity shares unless the holders of such convertible debt instruments have sent their positive consent to the issuer and non-receipt of reply to any notice sent by the issuer for this purpose shall not be construed as consent for conversion of any convertible debt instruments.
(2) Where the value of the convertible portion of any convertible debt instruments issued by a listed issuer exceeds fifty lakh rupees and the issuer has not determined the conversion price of such convertible debt instruments at the time of making the issue, the holders of such convertible debt instruments shall be given the option of not converting the convertible portion into equity shares:
Provided that where the upper limit on the price of such convertible debt instruments and jus
No issuer shall issue convertible debt instruments for financing replenishment of funds or for providing loan to or for acquiring shares of any person who is part of the same group or who is under the same management:
Provided that an issuer may issue fully convertible debt instruments for these purposes if the period of conversion of such debt instruments is less than eighteen months from the date of issue of such debt instruments.
Explanation: For the purpose of this regulation:
(I) Two persons shall be deemed to be "part of the same group" if they belong to the group within the meaning of clause (ef) of section 2 of the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969) or if they own "inter connected undertakings within the meaning of clause (g) of section 2 of the said Act;
No issuer shall alter the terms (including the terms of issue) of specified securities which may adversely affect the interests of the holders of that specified securities, except with the consent in writing of the holders of not less than three-fourths of the specified securities of that class or with the sanction of a special resolution passed at a meeting of the holders of the specified securities of that class.
Unless otherwise provided in this Chapter, an issuer making a public issue shall satisfy the conditions of this Chapter as on the date of filing draft offer document with the Board and also as on the date of registering the offer document with the Registrar of Companies.
(1) An issuer may make an initial public offer, if:
(a) it has net tangible assets of at least three crore rupees in each of the preceding three full years (of twelve months each), of which not more than fifty per cent. are held in monetary assets:
Provided that if more than fifty per cent. of the net tangible assets are held in monetary assets, the issuer has made firm commitments to utilise such excess monetary assets in its business or project;
15[Provided further that the limit of fifty per cent. on monetary assets shall not be applicable in case the public offer is made entirely through an offer for sale.]
16[(b) it has a track record of distributable profits in terms of section 205 of the Companies Act, 1956, on both stand-alone as well as con
An issuer may make a further public offer if it satisfies the conditions specified in clauses (d) and (e) of sub-regulation (1) of regulation 26 and if it does not satisfy those conditions, it may make a further public offer if it satisfies the conditions specified in sub-regulation (2) of regulation 26.
(1) An issuer may determine the price of specified securities in consultation with the lead merchant banker or through the book building process.
(2) An issuer may determine the coupon rate and conversion price of convertible debt instruments in consultation with the lead merchant banker or through the book building process.
(3) The issuer shall undertake the book building process in a manner specified in Schedule XI.
An issuer may offer specified securities at different prices, subject to the following:
(a) retail individual investors or retail individual shareholders 1[or employees 5[***] entitled for reservation made under regulation 42 making an application for specified securities of value not more than 11[two lakhs] rupees,] may be offered specified securities at a price lower than the price at which net offer is made to other categories of applicants:
Provided that such difference shall not be more than ten per cent. of the price at which specified securities are offered to other categories of applicants;
(b) in case of a book built issue, the price of the specified securities offered to an anchor investor shall not be lower than the price offered to other applicants;
(1) The issuer may mention a price or price band in the draft prospectus (in case of a fixed price issue) and floor price or price band in the red herring prospectus (in case of a book built issue) and determine the price at a later date before registering the prospectus with the Registrar of Companies: Provided that the prospectus registered with the Registrar of Companies shall contain only one price or the specific coupon rate, as the case may be.
(2) If the floor price or price band is not mentioned in the red herring prospectus, the issuer shall announce the floor price or price band at least two working days before the opening of the bid (in case of an initial public offer) and at least one working day before the opening of the bid (in case of a further public offer), in all the newspapers in which the pre issue advertisement was released.
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(1) Subject to the provisions of the Companies Act, 1956, the Act and these regulations, an issuer making an initial public offer may determine the face value of the equity shares in the following manner:
(a) if the issue price per equity share is five hundred rupees or more, the issuer shall have the option to determine the face value at less than ten rupees per equity share:
Provided that the face value shall not be less than one rupee per equity share;
(b) if the issue price per equity share is less than five hundred rupees, the face value of the equity shares shall be ten rupees per equity share:
Provided that nothing contained in this sub-regulation shall apply to initial public offer made by any government company, statutory authority or corpo
(1) The promoters of the issuer shall contribute in the public issue as follows:
(a) in case of an initial public offer, not less than twenty per cent. of the post issue capital;
(b) in case of a further public offer, either to the extent of twenty per cent. of the proposed issue size or to the extent of twenty per cent. of the post-issue capital;
(c) in case of a composite issue, either to the extent of twenty per cent. of the proposed issue size or to the extent of twenty per cent. of the post-issue capital excluding the rights issue component.
(2) In case of a public issue or composite issue of convertible securities, minimum promoters' contribution shall be as follows:
(a) the promoters shall contribu
(1) For the computation of minimum promoters' contribution, the following specified securities shall not be eligible:
(a) specified securities acquired during the preceding three years, if they are:
(i) acquired for consideration other than cash and revaluation of assets or capitalisation of intangible assets is involved in such transaction; or
(ii) resulting from a bonus issue by utilisation of revaluation reserves or unrealised profits of the issuer or from bonus issue against equity shares which are ineligible for minimum promoters' contribution;
(b) specified securities acquired by promoters during the preceding one year at a price lower than the price at which specified securities are being offered to public in the initial public offer:
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The requirements of minimum promoters' contribution shall not apply in case of:
(a) an issuer which does not have any identifiable promoter;
(b) a further public offer, where the equity shares 10[of the issuer] 12[***] are not infrequently traded in a recognised sk exchange for a period of at least three years and the issuer has a track record of dividend payment for at least immediately preceding three years:
Provided that where promoters propose to subscribe to the specified securities offered to the extent greater than higher of the two options available in clause (b) of sub-regulation (1) of regulation 32, the subscription in excess of such percentage shall be made at a price determined in terms of the provisions of regulation 76 or the issue price, whichever is higher.
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(1) Save as otherwise provided in this Chapter, specified securities held by promoters and persons other than promoters shall not be transferable (hereinafter referred to as "lock-in') from the date of allotment of the specified securities in the proposed public issue for the period stipulated in this Chapter.
(2) The certificate of specified securities which are subject to lock-in shall contain the inscription "non transferable" and the lock-in period and in case such specified securities are dematerialised, the issuer shall ensure that lock-in is recorded by the depository.
(3) Where the specified securities which are subject to lock-in are partly paid-up and the amount called-up on such specified securities is less than the amount called-up on the specified securities issued to the public, the "lock-in" shall end only on the expiry of
In a public issue, the specified securities held by promoters shall be locked-in for the period stipulated hereunder:
(a) minimum promoters' contribution shall be locked-in for a period of three years from the date of commencement of commercial production or date of allotment in the public issue, whichever is later;
(b) promoters' holding in excess of minimum promoters' contribution shall be locked-in for a period of one year:
Provided that excess promoters' contribution as provided in proviso to clause (b) of regulation 34 shall not be subject to lock-in.
Explanation: For the purposes of this clause, the expression "date of commencement of commercial production" means the last date of the month in which commercial production in a manufacturing comp
In case of an initial public offer, the entire pre-issue capital held by persons other than promoters shall be locked-in for a period of one year:
Provided that nothing contained in this regulation shall apply to:
(a) equity shares allotted to employees under an employee sk option or employee sk purchase scheme of the issuer prior to the initial public offer, if the issuer has made full disclosures with respect to such options or scheme in accordance with Part A of Schedule VIII;
(b) equity shares held by a venture capital fund or a foreign venture capital investor for a period of at least one year prior to the date of filing the draft prospectus with the Board:
Explanation: For the purpose of clause (b), in case such equity shares have resulted pur
The lock-in provisions of this Chapter shall not apply with respect to the specified securities lent to stabilising agent for the purpose of green shoe option, during the period starting from the date of lending of such specified securities and ending on the date on which they are returned to the lender in terms of sub-regulation (5) or (6) of regulation 45:
Provided that the specified securities shall be locked-in for the remaining period from the date on which they are returned to the lender.
Specified securities held by promoters and locked-in may be pledged with any scheduled commercial bank or public financial institution as collateral security for loan granted by such bank or institution, subject to the following:
(a) if the specified securities are locked-in in terms of clause (a) of regulation 36, the loan has been granted by such bank or institution for the purpose of financing one or more of the objects of the issue and pledge of specified securities is one of the terms of sanction of the loan;
(b) if the specified securities are locked-in in terms of clause (b) of regulation 36 and the pledge of specified securities is one of the terms of sanction of the loan.
Subject to the provisions of Securities and Exchange Board of India (Substantial Acquisition of shares and Takeovers) Regulations, 1997, the specified securities held by promoters and locked-in as per regulation 36 may be transferred to another promoter or any person of the promoter group or a new promoter or a person in control of the issuer and the specified securities held by persons other than promoters and locked-in as per regulation 37 may be transferred to any other person holding the specified securities which are locked-in along with the securities proposed to be transferred:
Provided that lock-in on such specified securities shall continue for the remaining period with the transferee and such transferee shall not be eligible to transfer them till the lock-in period stipulated in these regulations has expired.
(1) Subject to the provisions of sub-clause (b) of clause (2) of rule 19 of Securities Contracts (Regulations) Rules, 1957, the net offer to public:
(a) in case of an initial public offer, shall be at least ten per cent. or twenty five per cent. of the post-issue capital, as the case may be; and
(b) in case of a further public offer, shall be at least ten per cent. or twenty five per cent. of the issue size, as the case may be.
(2) Nothing contained in sub- regulation (1) shall apply if the issuer is:
(a) a government company or statutory authority or corporation or any special purpose vehicle set up and controlled by any one or more of them, which is engaged in infrastructure sector;
(b) an infrastructur
(1) In case of an issue made through the book building process, the issuer may make reservation on competitive basis out of the issue size excluding promoters' contribution and net offer to public in favour of the following categories of persons:
6[(a) employees; and in case of a new issuer, persons who are in the permanent and full time employment of the promoting companies excluding the promoters and an immediate relative of the promoter of such companies;]
(b) shareholders (other than promoters) of:
(i) listed promoting companies, in case of a new issuer; and
(ii) listed group companies, in case of an existing issuer:
Provided that if the promoting companies are designated financial institutions or sta
(1) No person shall make an application in the net offer to public category for that number of specified securities which exceeds the number of specified securities offered to public.
(2) In an issue made through the book building process, the allocation in the net offer to public category shall be made as follows:
(a) not less than thirty five per cent. to retail individual investors;
(b) not less than fifteen per cent. to non-institutional investors;
(c) not more than fifty per cent. to qualified institutional buyers, five per cent. of which shall be allocated to mutual funds:
Provided that in case of an issue made in terms of sub-clause (i) of clause (a) of sub-regulation (2) of regulation 26, at least
An issuer may provide for a safety-net arrangement for the specified securities offered in any public issue in consultation with the merchant banker after ascertaining the financial capacity of the person offering the safety-net arrangement, subject to disclosures specified in this regard in Part A of Schedule VIII:
Provided that any such arrangement shall provide for an offer to purchase up to a maximum of one thousand specified securities per original resident retail individual allottee at the issue price within a period of six months from the last date of despatch of security certificates or credit of demat account. Explanation: For the purpose of this regulation, the term "safety net arrangement" means an arrangement provided by the issuer under which a person offers to purchase specified securities from the original resident retail individual allottees at the issue price.
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(1) An issuer making a public issue of specified securities may provide green shoe option for stabilising the post listing price of its specified securities, subject to the following:
(a) the issuer has been authorized, by a resolution passed in the general meeting of shareholders approving the public issue, to allot specified securities to the stabilising agent, if required, on the expiry of the stabilisation period;
(b) the issuer has appointed a merchant banker or book runner, as the case may be, from amongst the merchant bankers appointed by the issuer as a stabilising agent, who shall be responsible for the price stabilisation process;
(c) prior to filing the draft offer document with the Board, the issuer and the stabilising agent have entered into an agreement, stating all the terms and
(1) 8[Except as otherwise provided in these regulations] A public issue shall be kept open for at least three working days but not more than ten working days including the days for which the issue is kept open in case of revision in price band.
(2) In case the price band in a public issue made through the book building process is revised, the bidding (issue) period disclosed in the red herring prospectus shall be extended for a minimum period of three working days:
Provided that the total bidding period shall not exceed ten working days.
8. Inserted by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2010 vide Notification No. LAD-NRO/GN/2010-11/03/1104 dated 13.04.2010.
(1) Subject to the provisions of section 66 of the Companies Act, 1956, the issuer shall, after registering the red herring prospectus (in case of a book built issue) or prospectus (in case of fixed price issue) with the Registrar of Companies, 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.
(2) The pre-issue advertisement shall be in the format and shall contain the disclosures specified in Part A of Schedule XIII.
An issuer may issue advertisements for issue opening and issue closing advertisements, which shall be in the formats specified in Parts B and C of Schedule XIII.
(1) The issuer shall stipulate in the offer document, the minimum application size in terms of number of specified securities which shall fall within the range of minimum application value of five thousand rupees to seven thousand rupees.
(2) The issuer shall invite applications in multiples of the minimum application value, an illustration whereof is given in Schedule XIV.
(3) The minimum sum payable on application shall not be less than twenty five per cent. of the issue price:
Provided that in case of an offer for sale, the issue price payable for each specified security shall be brought in at the time of application.
Explanation: For the purpose of this regulation, "minimum application value" shall be with reference to the issue price of the spe
(1) The allotment of specified securities to applicants other than anchor investors shall be on proportionate basis within the specified investor categories and the number of securities allotted shall be rounded off to the nearest integer, subject to minimum allotment being equal to the minimum application size as determined and disclosed by the issuer.
1[Provided that value of specified securities allotted to any person in pursuance of reservation made under clause (a) of sub-regulation (1) or clause (a) of sub-regulation (2) of regulation 42, shall not exceed 14[two lakhs] rupees.]
(2) The executive director or managing director of the designated sk exchange along with the post issue lead merchant bankers and registrars to the issue shall ensure that the basis of allotment is finalised in a fair and proper manner in accordance with the
The post-issue lead merchant banker shall ensure that moneys received in respect of the issue are released to the issuer in compliance with the provisions of section 73 of the Companies Act, 1956.
(1) A listed issuer making a rights issue shall announce a record date for the purpose of determining the shareholders eligible to apply for specified securities in the proposed rights issue.
(2) The issuer shall not withdraw rights issue after announcement of the record date.
(3) If the issuer withdraws the rights issue after announcing the record date, it shall not make an application for listing of any of its specified securities on any recognised sk exchange for a period of twelve months from the record date announced under sub-regulation (1):
Provided that the issuer may seek listing of its equity shares allotted pursuant to conversion or exchange of convertible securities issued prior to the announcement of the record date, on the recognised sk exchange where its securities are listed.
(1) No issuer shall make a rights issue of equity shares if it has outstanding fully or partly convertible debt instruments at the time of making rights issue, unless it has made reservation of equity shares of the same class in favour of the holders of such outstanding convertible debt instruments in proportion to the convertible part thereof.
(2) The equity shares reserved for the holders of fully or partially convertible debt instruments shall be issued at the time of conversion of such convertible debt instruments on the same terms on which the equity shares offered in the rights issue were issued.
(1) The abridged letter of offer, along with application form, shall be dispatched through registered post or speed post to all the existing shareholders at least three days before the date of opening of the issue:
Provided that the letter of offer shall be given by the issuer or lead merchant banker to any existing shareholder who has made a request in this regard.
(2) The shareholders who have not received the application form may apply in writing on a plain paper, along with the requisite application money.
(3) The shareholders making application otherwise than on the application form shall not renounce their rights and shall not utilise the application form for any purpose including renunciation even if it is received subsequently.
(4) Where any
(1) The issuer shall issue an advertisement for rights issue disclosing the following:
(a) the date of completion of despatch of abridged letter of offer and the application form;
(b) the centres other than registered office of the issuer where the shareholders or the persons entitled to receive the rights entitlements may obtain duplicate copies of the application forms in case they do not receive the application form within a reasonable time after opening of the rights issue;
(c) a statement that if the shareholders entitled to receive the rights entitlements have neither received the original application forms nor they are in a position to obtain the duplicate forms, they may make application in writing on a plain paper to subscribe to the rights issue;
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Subject to other applicable provision of these regulations the issuer may make reservation for 2[***] employees along with rights issue subject to the condition that value of allotment to any employee shall not exceed 4[two lakhs] rupees.]
_______________________________
1. Inserted Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2009 vide Notification No. LAD-NRO/GN/2009-10/23/186926 dated 11.12.2009.
2. Omitted by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2010 vide Notification No. LAD-NRO/GN/2010-11/03/1104 dated 13.04.2010 previous text was : - "its"
4. Substituted by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requ
The issuer shall utilise funds collected in rights issues after the finalisation of the basis of allotment.
(1) The offer document shall contain all material disclosures which are true and adequate so as to enable the applicants to take an informed investment decision.
(2) Without prejudice to the generality of sub-regulation (1):
(a) the red-herring prospectus, shelf prospectus and prospectus shall contain:
(i) the disclosures specified in Schedule II of the Companies Act, 1956; and
(ii) the disclosures specified in Part A of Schedule VIII, subject to the provisions of Parts B and C thereof.
(b) the letter of offer shall contain disclosures as specified in Part E of Schedule VIII.
(1) The abridged prospectus shall contain the disclosures of the memorandum prescribed under sub-section (3) of section 56 of the Companies Act, 1956 and additional disclosures as specified in Part D of Schedule VIII.
(2) The abridged letter of offer shall contain the disclosures as specified in Part F of Schedule VIII.
(3) The abridged prospectus and abridged letter of offer shall not contain any matter extraneous to the contents of the offer document.
(4) Every application form including ASBA form distributed by the issuer or any other person in relation to an issue shall be accompanied by a copy of the abridged prospectus or abridged letter of offer, as the case may be.
1[(5) In all public issues and rights issues, where not more than one payment
No person connected with the issue shall offer any incentive, whether direct or indirect, in any manner, whether in cash or kind or services or otherwise to any person for making an application for allotment of specified securities:
Provided that nothing contained in this regulation shall apply to fees or commission for services rendered in relation to the issue.
Explanation: For the purpose of this regulation, the expression "person connected with the issue" includes a person connected with the distribution of the issue.
(1) Any public communication including advertisement and publicity material issued by the issuer or research report made by the issuer or any intermediary concerned with the issue or their associates shall contain only factual information and shall not contain projections, estimates, conjectures, etc. or any matter extraneous to the contents of the offer document.
(2) All public communications and publicity material issued or published in any media during the period commencing from the date of the meeting of the board of directors of the issuer in which the public issue or rights issue is approved till the date of filing draft offer document with the Board shall be consistent with its past practices:
Provided that where such public communication or publicity material is not consistent with the past practices of the issuer, it shall be pr
(1) The issuer and lead merchant bankers shall ensure that the contents of offer documents hosted on the websites as required in these regulations are the same as that of their printed versions as filed with the Registrar of Companies, Board and the sk exchanges.
(2) The lead merchant bankers and the recognised sk exchange shall provide copies of the draft offer document and final offer document to the public as and when requested.
(3) The lead merchant bankers or the recognised sk exchange may charge a reasonable sum for providing the copy of the offer document.
The post-issue lead merchant bankers shall actively associate himself with post-issue activities such as allotment, refund, despatch and giving instructions to syndicate members, Self Certified Syndicate Banks and other intermediaries and shall regularly monitor redressal of investor grievances arising therefrom.
The issuer shall appoint a compliance officer who shall be responsible for monitoring the compliance of the securities laws and for redressal of investors' grievances.
Explanation: For the purpose of this regulation, the term "securities laws" means the Companies Act, 1956, the Act, the Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996 and the rules and regulations made thereunder and the regulations, general or special orders, guidelines or circulars made or issued by the Board.
(1) The lead merchant bankers shall exercise due diligence and satisfy himself about all the aspects of the issue including the veracity and adequacy of disclosure in the offer documents.
(2) The lead merchant bankers shall call upon the issuer, its promoters or directors or in case of an offer for sale, the selling shareholders, to fulfil their obligations as disclosed by them in the offer document and as required in terms of these Regulations.
(3) The post-issue merchant banker shall continue to be responsible for post-issue activities till the subscribers have received the securities certificates, credit to their demat account or refund of application moneys and the listing agreement is entered into by the issuer with the sk exchange and listing/ trading permission is obtained.
(4) The resp
(1) The lead merchant banker shall submit post-issue reports to the Board in accordance with sub-regulation (2).
(2) The post-issue reports shall be submitted as follows:
(a) initial post issue report as specified in Parts A and B of Schedule XVI, within three days of closure of the issue
(b) final post issue report as specified in Parts C and D of Schedule XVI, within fifteen days of the date of finalisation of basis of allotment or within fifteen days of refund of money in case of failure of issue.
(3) The lead merchant banker shall submit a due diligence certificate as per the format specified in Form G of Schedule VI, along with the final post issue report.
(1) The post-issue merchant banker shall ensure that advertisement giving details relating to oversubscription, basis of allotment, number, value and percentage of all applications including ASBA, number, value and percentage of successful allottees for all applications including ASBA, date of completion of despatch of refund orders or instructions to Self Certified Syndicate Banks by the Registrar, date of despatch of certificates and date of filing of listing application, etc. is released within ten days from the date of completion of the various activities in at least one English national daily newspaper with wide circulation, one Hindi national daily newspaper with wide circulation and one regional language daily newspaper with wide circulation at the place where registered office of the issuer is situated.
(2) The post-issue merchant banker shall ensure that issuer, advisors,
(1) The post-issue merchant banker shall maintain close co-ordination with the registrars to the issue and arrange to depute its officers to the offices of various intermediaries at regular intervals after the closure of the issue to monitor the flow of applications from collecting bank branches and/or Self Certified Syndicate Banks, processing of the applications including application form for ASBA and other matters till the basis of allotment is finalised, despatch of security certificates and refund orders are completed and securities are listed.
(2) Any act of omission or commission on the part of any of the intermediaries noticed during such visits shall be duly reported to the Board.
(3) In case there is a devolvement on underwriters, the merchant banker shall ensure that the notice for devolvement containing the obligation of the
The merchant banker shall ensure that the information contained in the offer document and the particulars as per audited financial statements in the offer document are not more than six months old from the issue opening date.
(1) The post-issue merchant banker shall ensure that the despatch of refund orders, allotment letters and share certificates is done by way of registered post or certificate of posting, as may be applicable.
(2) The post-issue merchant banker shall ensure payment of interest to the applicants for delayed dispatch of allotment letters, refund orders, etc. as per the disclosure made in the offer document.
(3) In case of absence of definite information about subscription figures, the issue shall be kept open for the required number of days to avoid any dispute, at a later date, by the underwriters in respect of their liability.
(4) The issuer shall ensure that transactions in securities by the promoter and promoter group during the period between the date of registering the offer document with th
(1) The provisions of this Chapter shall not apply where the preferential issue of equity shares is made:
(a) pursuant to conversion of loan or option attached to convertible debt instruments in terms of sub-sections (3) and (4) of sections 81 of the Companies Act, 1956;
(b) pursuant to a scheme approved by a High Court under section 391 to 394 of the Companies Act, 1956;
(c) in terms of the rehabilitation scheme approved by the Board of Industrial and Financial Reconstruction under the Sick Industrial Companies (Special Provisions) Act, 1985:
1[Provided that the lock-in provisions of this Chapter shall apply to preferential issue of equity shares mentioned in clause (c).]
(2) The provisions of this Chapt
For the purpose of this Chapter, "relevant date" means:
(a) in case of preferential issue of equity shares, the date thirty days prior to the date on which the meeting of shareholders is held to consider the proposed preferential issue:
Provided that in case of preferential issue of equity shares pursuant to a scheme approved under the Corporate Debt Restructuring framework of Reserve Bank of India, the date of approval of the Corporate Debt Restructuring Package shall be the relevant date.
(b) in case of preferential issue of convertible securities, either the relevant date referred to in clause (a) of this regulation or a date thirty days prior to the date on which the holders of the convertible securities become entitled to apply for the equity shares.
(1) A listed issuer may make a preferential issue of specified securities, if:
(a) a special resolution has been passed by its shareholders;
(b) all the equity shares, if any, held by the proposed allottees in the issuer are in dematerialised form;
(c) the issuer is in compliance with the conditions for continuous listing of equity shares as specified in the listing agreement with the recognised sk exchange where the equity shares of the issuer are listed;
(d) the issuer has obtained the Permanent Account Number of the proposed allottees.
(2) The issuer shall not make preferential issue of specified securities to any person who has sold any equity shares of the issuer during the six months preceding the r
(1) The issuer shall, in addition to the disclosures required under section 173 of the Companies Act, 1956 or any other applicable law, disclose the following in the explanatory statement to the notice for the general meeting proposed for passing special resolution:
(a) the objects of the preferential issue;
(b) the proposal of the promoters, directors or key management personnel of the issuer to subscribe to the offer;
(c) the shareholding pattern of the issuer before and after the preferential issue;
(d) the time within which the preferential issue shall be completed;
(e) the identity of the proposed allottees, the percentage of post preferential issue capital that may be held by them and change in cont
(1) Allotment pursuant to the special resolution shall be completed within a period of fifteen days from the date of passing of such resolution:
Provided that where any application for exemption from the applicability of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 or any approval or permission by any regulatory authority or the Central Government for allotment is pending, the period of fifteen days shall be counted from the date of order on such application or the date of approval or permission, as the case may be:
Provided further that where the Board has granted relaxation to the issuer in terms of regulation 29A of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, the preferential issue of equity shares and compulsorily convertible debt instrume
The tenure of the convertible securities of the issuer shall not exceed eighteen months from the date of their allotment.
(1) If the equity shares of the issuer have been listed on a recognised sk exchange for a period of six months or more as on the relevant date, the equity shares shall be allotted at a price not less than higher of the following:
(a) The average of the weekly high and low of the closing prices of the related equity shares quoted on the recognised sk exchange during the six months preceding the relevant date; or
(b) The average of the weekly high and low of the closing prices of the related equity shares quoted on a recognised sk exchange during the two weeks preceding the relevant date.
(2) If the equity shares of the issuer have been listed on a recognised sk exchange for a period of less than six months as on the relevant date, the equity shares shall be allotted at a price not less than the
(1) Full consideration of specified securities other than warrants issued under this Chapter shall be paid by the allottees at the time of allotment of such specified securities:
Provided that in case of a preferential issue of specified securities pursuant to a scheme of corporate debt restructuring as per the corporate debt restructuring framework specified by the Reserve Bank of India, the allottee may pay the consideration in terms of such scheme.
(2) An amount equivalent to at least twenty five per cent. of the consideration determined in terms of regulation 76 shall be paid against each warrant on the date of allotment of warrants.
(3) The balance seventy five per cent. of the consideration shall be paid at the time of allotment of equity shares pursuant to exercise of option against eac
(1) The specified securities allotted on preferential basis to promoter or promoter group and the equity shares allotted pursuant to exercise of options attached to warrants issued on preferential basis to promoter or promoter group, shall be locked-in for a period of three years from the date of allotment of the specified securities or equity shares allotted pursuant to exercise of the option attached to warrant, as the case may be:
Provided that not more than twenty per cent. of the total capital of the issuer shall be locked-in for three years from the date of allotment:
Provided further that equity shares allotted in excess of the twenty per cent. shall be locked-in for one year from the date of their allotment pursuant to exercise of options or otherwise, as the case may be.
(2) The speci
Subject to the provisions of Securities and Exchange Board of India (Substantial Acquisition of shares and Takeovers) Regulations, 1997, specified securities held by promoters and locked-in in terms of sub-regulation (1) of regulation 78 may be transferred among promoters or promoter group or to a new promoter or persons in control of the issuer:
Provided that lock-in on such specified securities shall continue for the remaining period with the transferee.
The provisions of this Chapter shall apply to a qualified institutions placement made by a listed issuer.
For the purpose of this Chapter:
(a) "eligible securities" include equity shares, non-convertible debt instruments along with warrants and convertible securities other than warrants;
(b) "qualified institutions placement" means allotment of eligible securities by a listed issuer to qualified institutional buyers on private placement basis in terms of these regulations;
(c) "relevant date" means:
(i) in case of allotment of equity shares, the date of the meeting in which the board of directors of the issuer or the committee of directors duly authorised by the board of directors of the issuer decides to open the proposed issue;
(ii) in case of allotment of eligible convertible securities, either the date of
A listed issuer may make qualified institutions placement if it satisfies the following conditions:
(a) a special resolution approving the qualified institutions placement has been passed by its shareholders;
(b) the equity shares of the same class, which are proposed to be allotted through qualified institutions placement or pursuant to conversion or exchange of eligible securities offered through qualified institutions placement, have been listed on a recognised sk exchange having nation wide trading terminal for a period of at least one year prior to the date of issuance of notice to its shareholders for convening the meeting to pass the special resolution:
Provided that where an issuer, being a transferee company in a scheme of merger, de-merger, amalgamation or arrangement sanctioned by a
(1) A qualified institutions placement shall be managed by merchant banker(s) registered with the Board who shall exercise due diligence.
(2) The merchant banker shall, while seeking in-principle approval for listing of the eligible securities issued under qualified institutions placement, furnish to each sk exchange on which the same class of equity shares of the issuer are listed, a due diligence certificate stating that the eligible securities are being issued under qualified institutions placement and that the issuer complies with requirements of this Chapter.
(1) The qualified institutions placement shall be made on the basis of a placement document which shall contain all material information, including those specified in Schedule XVIII.
(2) The placement document shall be serially numbered and copies shall be circulated only to select investors.
(3) The issuer shall, while seeking in-principle approval from the recognised sk exchange, furnish a copy of the placement document, a certificate confirming compliance with the provisions of this Chapter along with any other documents required by the sk exchange.
(4) The placement document shall also be placed on the website of the concerned sk exchange and of the issuer with a disclaimer to the effect that it is in connection with a qualified institutions placement and that no offer is being made to the
(1) The qualified institutions placement shall be made at a price not less than the average of the weekly high and low of the closing prices of the equity shares of the same class quoted on the sk exchange during the two weeks preceding the relevant date.
(2) Where eligible securities are convertible into or exchangeable with equity shares of the issuer, the issuer shall determine the price of such equity shares allotted pursuant to such conversion or exchange taking the relevant date as decided and disclosed by it while passing the special resolution.
(3) The issuer shall not allot partly paid up eligible securities:
Provided that in case of allotment of non convertible debt instruments along with warrants, the allottees may pay the full consideration or part thereof payable with respect to w
(1) Allotment under the qualified institutions placement shall be made subject to the following conditions:
(a) Minimum often per cent. of eligible securities shall be allotted to mutual funds:
Provided that if the mutual funds do not subscribe to said minimum percentage or any part thereof, such minimum portion or part thereof may be allotted to other qualified institutional buyers;
(b) No allotment shall be made, either directly or indirectly, to any qualified institutional buyer who is a promoter or any person related to promoters of the issuer:
Provided that a qualified institutional buyer who does not hold any shares in the issuer and who has acquired the said rights in the capacity of a lender shall not be deemed to be a person related to prom
(1) The minimum number of allottees for each placement of eligible securities made under qualified institutions placement shall not be less than:
(a) two, where the issue size is less than or equal to two hundred and fifty crore rupees;
(b) five, where the issue size is greater than two hundred and fifty crore rupees:
Provided that no single allottee shall be allotted more than fifty per cent. of the issue size.
(2) The qualified institutional buyers belonging to the same group or who are under same control shall be deemed to be a single allottee.
Explanation: For the purpose of sub-regulation (2), the expression "qualified institutional buyers belonging to the same group" shall have the same meaning as d
(1) Allotment pursuant to the special resolution referred to in clause (a) of regulation 82 shall be completed within a period of twelve months from the date of passing of the resolution.
(2) The issuer shall not make subsequent qualified institutions placement until expiry of six months from the date of the prior qualified institutions placement made pursuant to one or more special resolutions.
The aggregate of the proposed qualified institutions placement and all previous qualified institutions placements made by the issuer in the same financial year shall not exceed five times the net worth of the issuer as per the audited balance sheet of the previous financial year.
The tenure of the convertible or exchangeable eligible securities issued through qualified institutions placement shall not exceed sixty months from the date of allotment.
The eligible securities allotted under qualified institutions placement shall not be sold by the allottee for a period of one year from the date of allotment, except on a recognised sk exchange.
Subject to the provisions of the Companies Act, 1956 or any other applicable law for the time being in force, a listed issuer may issue bonus shares to its members if:
(a) it is authorised by its articles of association for issue of bonus shares, capitalisation of reserves, etc.:
Provided that if there is no such provision in the articles of association, the issuer shall pass a resolution at its general body meeting making provisions in the articles of associations for capitalisation of reserve;
(b) it has not defaulted in payment of interest or principal in respect of fixed deposits or debt securities issued by it;
(c) it has sufficient reason to believe that it has not defaulted in respect of the payment of statutory dues of the employees such as
(1) No issuer shall make a bonus issue of equity shares if it has outstanding fully or partly convertible debt instruments at the time of making the bonus issue, unless it has made reservation of equity shares of the same class in favour of the holders of such outstanding convertible debt instruments in proportion to the convertible part thereof.
(2) The equity shares reserved for the holders of fully or partly convertible debt instruments shall be issued at the time of conversion of such convertible debt instruments on the same terms or same proportion on which the bonus shares were issued.
(1) The bonus issue shall be made out of free reserves built out of the genuine profits or securities premium collected in cash only and reserves created by revaluation of fixed assets shall not be capitalised for the purpose of issuing bonus shares.
(2) Without prejudice to the provisions of sub-regulation (1), the bonus share shall not be issued in lieu of dividend.
(1) An issuer, announcing a bonus issue after the approval of its board of directors and not requiring shareholders' approval for capitalisation of profits or reserves for making the bonus issue, shall implement the bonus issue within fifteen days from the date of approval of the issue by its board of directors:
Provided that where the issuer is required to seek shareholders' approval for capitalisation of profits or reserves for making the bonus issue, the bonus issue shall be implemented within two months from the date of the meeting of its board of directors wherein the decision to announce the bonus issue was taken subject to shareholders' approval.
(2) Once the decision to make a bonus issue is announced, the issue can not be withdrawn.
(1) The provisions of this Chapter shall apply to an issue of Indian Depository Receipts (hereinafter referred to as "IDR") made in terms of section 605A of the Companies Act, 1956 and Companies (Issue of Indian Depository Receipts) Rules, 2004.
(2) All provisions of these regulations shall be applicable in case of issue of IDR, except the disclosure requirements with respect to public issue and rights issue of specified securities as provided in these regulations and the following:
(a) clauses (a), (b), (c) and (f) of sub-regulation (2) of regulation 4;
(b) sub-regulations (1), (2) and (3) of regulation 6,
(c) clauses (c),(d) and (e) of sub-regulation (1) of regulation 8;
(d) sub-regulations (2) and (3)
An issuing company making an issue of IDR shall also satisfy the following:
(a) the issuing company is listed in its home country;
(b) the issuing company is not prohibited to issue securities by any regulatory body;
(c) the issuing company has track record of compliance with securities market regulations in its home country.
Explanation: For the purpose of this regulation, the term "home country" means the country where the issuing company is incorporated and listed.
An issue of IDR shall be subject to the following conditions:
(a) issue size shall not be less than fifty crore rupees;
(b) procedure to be followed by each class of applicant for applying shall be mentioned in the prospectus;
(c) minimum application amount shall be twenty thousand rupees;
(d) at least fifty per cent. of the IDR issued shall be allotted to qualified institutional buyers on proportionate basis as per illustration given in Part C of Schedule XI;
(e) the balance fifty per cent. may be allocated among the categories of non-institutional investors and retail individual investors including employees at the discretion of the issuer and the manner of allocation shall be disclosed in the prospectu
(1) For non-underwritten issues:
(a) If the issuing company does not receive the minimum subscription of ninety per cent. of the offer through offer document on the date of closure of the issue, or if the subscription level falls below ninety per cent. after the closure of issue on account of cheques having being returned unpaid or withdrawal of applications, the issuing company shall forthwith refund the entire subscription amount received.
(b) If the issuing company fails to refund the entire subscription amount within fifteen days from the date of the closure of the issue, it is liable to pay the amount with interest to the subscribers at the rate of fifteen per cent. per annum for the period of delay.
(2) For underwritten issues: If the issuing company does not receive the minimum subscrip
The Indian depository Receipts shall not be automatically fungible into underlying equity shares of issuing company.
(1) The issuing company making an issue of IDR shall enter into an agreement with a merchant banker on the lines of format of agreement specified in Schedule II.
(2) Where the issue is managed by more than one merchant banker, the rights, obligations and responsibilities, relating inter-alia to disclosures, allotment, refund and underwriting obligations, if any, of each merchant banker shall be predetermined and disclosed in the prospectus on the lines of format as specified in Schedule I.
(3) The issuing company shall file a draft prospectus with the Board through a merchant banker along with the requisite fee, as prescribed in Companies (Issue of Indian Depository Receipts) Rules, 2004.
(4) The prospectus filed with the Board under this regulation shall also be furnished to the Board in a so
The sk exchanges offering online bidding system for the book building process shall display on their website, the data pertaining to book built IDR issue, in the format specified in Part B(II) of Schedule XI, from the date of opening of the bids till at least three days after closure of bids.
(1) The prospectus shall contain all material disclosures which are true, correct and adequate so as to enable the applicants to take an informed investment decision.
(2) Without prejudice to the generality of sub-regulation (1), the prospectus shall contain:
(a) the disclosures specified in Schedule to Companies (Issue of Indian Depository Receipts) Rules, 2004; and
(b) the disclosures in the manner as specified in Part A of Schedule XIX.
(3) The abridged prospectus for issue of Indian Depository Receipts shall contain the disclosures as specified in Part B of Schedule XIX.
(1) The merchant banker shall submit post-issue reports to the Board in accordance with sub-regulation (2).
(2) The post-issue reports shall be submitted as follows:
(a) initial post issue report on the lines of Parts A and B of Schedule XVI, within three days of closure of the issue;
(b) final post issue report on the lines of Parts C and D of Schedule XVI, within fifteen days of the date of finalisation of basis of allotment or within fifteen days of refund of money in case of failure of issue.
In case of under subscribed issue of IDR, the merchant banker shall furnish information in respect of underwriters who have failed to meet their underwriting devolvement to the Board on the lines of the format specified in Schedule XVII.
The executive director or managing director of the sk exchange, where the IDR are proposed to be listed, along with the post issue lead merchant bankers and registrars to the issue shall ensure that the basis of allotment is finalised in a fair and proper manner in accordance with the allotment procedure as specified in Schedule XV.
(1) In addition to compliance with Chapter X, a listed issuer offering IDR through a rights issue shall satisfy the conditions specified in this Chapter at the time of filing the offer document:
Provided that the provisions of the following regulations shall not be applicable in case of rights issue of IDRs:
(a) clauses (a), (b), (c), (d) and (e) of regulation 98;
(b) regulation 102; and
(c) regulation 103.
(2) Every listed issuer offering IDRs through a rights issue shall prepare the offer document in accordance with the home country requirements along with an addendum containing disclosures as specified in Part A of Schedule XXI and regulation 106F and file the same with the Board and the sk exchanges o
No issuer shall make a rights issue of IDRs:
(a) if at the time of undertaking the rights issue, the issuer is in breach of ongoing material obligations under the IDR Listing Agreement as may be applicable to such issuer or material obligations under the deposit agreement entered into between the domestic depository and the issuer at the time of initial offering of IDRs; and
(b) unless it has made an application to all the recognised sk exchanges in India, where its IDRs are already listed, for listing of the IDRs to be issued by way of rights and has chosen one of them as the designated sk exchange.
Unless the laws of the home jurisdiction of the issuer company otherwise provide, the rights offering shall be deemed to include a right exercisable by the person concerned to renounce the IDRs offered to the IDR holder in favour of any other person subject to applicable laws and the same shall be disclosed in the offer document.
The domestic depository shall, in accordance with the depository agreement executed with the issuer at the time of initial offering of IDRs, take such steps as are necessary to enable the IDR holders to have entitlements under the rights offering and issue additional IDRs to such IDR holders, distribute the rights to the IDR Holders/renouncees or arrange for the IDR holders/renouncees to subscribe for any additional rights which are available due to lack of take-up by other holders of underlying shares.
(1) A listed issuer making a rights issue of IDRs shall in accordance with provisions of the listing agreement, announce a record date for the purpose of determining the shareholders eligible to apply for IDRs in the proposed rights issue.
(2) If the issuer withdraws the rights issue after announcing the record date, it shall notify the Board about the same and shall notify the same in one English national daily newspaper with wide circulation, one Hindi national daily newspaper with wide circulation and one regional language daily newspaper with wide circulation at the place where principal office of the issuer is situated in India. If the issuer withdraws the rights issue after announcing the record date, it shall not make an application for offering of IDRs on a rights basis for a period of twelve months from the said record date.
(1) The offer document for the rights offering shall contain disclosures as required under the home country regulations of the issuer.
(2) Apart from the disclosures as required under the home country regulations, an additional wrap (addendum to offer document) shall be attached to the offer document to be circulated in India containing information as specified in Part A of
Schedule XXI and other instructions as to the procedures and process to be followed with respect to rights issue of IDRs in India.
(3) Without prejudice to the generality of sub-regulations (1) and (2), the offer document and the addendum attached with it, shall contain all material information, which are true, correct and adequate, so as to enable the applicants to take an informed investment decision.
(1) The issuer shall appoint one or more merchant bankers, one of whom shall be a lead merchant banker and shall also appoint other intermediaries, in consultation with the lead merchant banker, to carry out the obligations relating to the issue.
(2) The issuer shall, through the lead merchant banker, file the draft offer document prepared in accordance with the home country requirements along with an addendum containing disclosures as specified in Part A of Schedule XXI with the Board, as a confidential filing accompanied with fees as specified in Part A of Schedule IV.
(3) The Board may specify changes or issue observations, if any, on the draft offer document and the addendum within thirty days or from the following dates, whichever is later:
(a) the date of receipt of the draft offer docum
(1) Nothing contained in sub-regulations (1), (2), (3) and (4) of regulation 106G shall apply, if the issuer satisfies the following conditions:
(a) the issuer is in compliance in all material respects with the provisions of deposit agreement and the provisions of listing agreements (or listing conditions) applicable in all the jurisdictions wherever the issuer is listed, for a period of at least three years immediately preceding the date of filing of the offer document, and a certification to this effect is provided by the issuer;
(b) the offer document for the rights offering of the securities of the issuer has been filed and reviewed by the securities regulator in the home country of the issuer;
(c) there are no pending show-cause notices or prosecution proceedings against the issuer or its
(1) The abridged letter of offer, containing disclosures as specified in Part B of Schedule XXI, for a rights offering, along with application form, shall be dispatched through registered post or speed post to all the eligible IDR holders at least three days before the date of opening of the issue and shall be made available on the website of the issuer with appropriate access restrictions at the same time it is made available to the holders of its equity shares.
Provided that a hard copy of the offer document for a rights offering along with the addendum shall be made available at the principal office of the issuer or lead merchant banker to any existing IDR holder who has made a request in this regard.
(2) The eligible IDR holders who have not received the application form may apply in writing on a plain paper to the domestic depositor
A rights issue shall be open for subscription in India for a period as applicable under the laws of its home country but in no case less than 10 days.
(1) The issuer shall issue an advertisement for the rights issue disclosing the following:
(a) the date of completion of despatch of the abridged letter of offer and the application form;
(b) the centres other than principal office of the issuer in India where the eligible IDR holders may obtain duplicate copies of the application forms in case they do not receive the application form within a reasonable time after opening of the rights issue;
(c) a statement that if the eligible IDR holders have neither received the original application forms nor they are in a position to obtain the duplicate forms, they may make application in writing on a plain paper to subscribe to the rights issue;
(d) a format to enable the eligible IDR holders, to make the ap
(1) The issuer shall utilise funds raised in relation to the IDRs pursuant to the rights offering only upon completion of the allotment process.]
Without prejudice to the power under sections 11, 11A, 11B, 11D, sub-section (3) of section 12, Chapter VIA and section 24 of the Act or section 621 of the Companies Act, 1956, the Board may either suo motu or on receipt of information or on completion or pendency of any inspection, inquiry or investigation, in the interests of investors or the securities market, issue such directions or orders as it deems fit including any or all of the following:
(a) directing the persons concerned not to access the securities market for a specified period;
(b) directing the person concerned to sell or divest the securities;
(c) any other direction which Board may deem fit and proper in the circumstances of the case:
Provided that the Board shall, either before or
In order to remove any difficulties in the application or interpretation of these regulations, the Board may issue clarifications through guidance notes or circulars after recording reasons in writing.
The Board may, in the interest of investors or for the development of the securities market, relax the strict enforcement of any requirement of these regulations, if the Board is satisfied that:
(a) the requirement is procedural in nature; or
(b) any disclosure requirement is not relevant for a particular class of industry or issuer; or
(c) the non-compliance was caused due to factors beyond the control of the issuer.
On and from the commencement of these regulations, the regulations mentioned in Schedule XX shall stand amended to the extent specified therein.
(1) On and from the commencement of these regulations, the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 shall stand rescinded.
(2) Notwithstanding such rescission:
(a) anything done or any action taken or purported to have been done or taken including observation made in respect of any draft offer document, any enquiry or investigation commenced or show cause notice issued in respect of the said Guidelines shall be deemed to have been done or taken under the corresponding provisions of these regulations;
(b) any offer document, whether draft or otherwise, filed or application made to the Board under the said Guidelines and pending before it shall be deemed to have been filed or made under the corresponding provisions of these regulations.
SCHEDULE I
[See regulation 5(3) and 101(2)]
INTER-SE ALLOCATION OF RESPONSIBILITIES
(1) The lead merchant bankers shall make inter-se allocation of responsibilities pertaining to the activities or sub-activities to be carried out under these regulations.
(2) The lead merchant bankers shall delineate the activity-wise allocation of responsibilities and intimate the Board about the name of the lead merchant banker responsible for each set of the activities or sub-activities at the time of filing the draft offer document with the Board. This intimation must be signed by all the lead merchant bankers to the issue.
(3) Where circumstances warrant joint and several responsibility of the lead merchant bankers fo
SCHEDULE II
[See regulations 5(5) and 101(1)]
FORMAT OF AGREEMENT BETWEEN LEAD MERCHANT BANKERS TO THE ISSUE AND ISSUER/ISSUING COMPANY
This Agreement made BETWEEN.......(name of the issuer), having its registered office at......... (registered office address of the issuer) (hereinafter referred to as "the issuer") AND.............(name of the lead merchant bankers), having their registered office at......................with the branch office at.......
WHEREAS:
(1) The issuer is taking steps for the issue of......................(particulars of the issue) to the public/ existing shareholders of the issuer (the said issue of specified securities hereinafter referred to as "the issue"); AND
SCHEDULE III
[See regulation 5(6) and 101(7)]
MANDATORY COLLECTION CENTRES
(1) The minimum number of collection centres shall be as follows:
(a) The four metropolitan centres situated at Mumbai, Delhi, Kolkata and Chennai.
(b) All such places where the recognised sk exchanges are located in the region in which the registered office of the issuer is situated;
(c) The region-wise collection centres are as indicated hereunder:
Sr. No. Name of the Recognised Sk Exchange City
(A) NORTHERN REGION
(i) Ludhiana Sk Exchange Ltd. Ludhia
SCHEDULE IV
[See regulations 6(1), 10(2) and 11(4)]
FEES TO BE PAID ALONG WITH OFFER DOCUMENT
(1) There shall be charged in respect of every draft offer document, every offer document (in case of a fast track issue) and in case of updation of any draft offer document, fees at the rate as specified in Part A and Part B of this Schedule.
(2) The fees shall be paid by means of a demand draft drawn in favour of 'the Securities and Exchange Board of India' payable at the place where the draft offer document or offer document or updated draft offer document, as the case may be, is filed with the Board.
PART A
FEES TO BE PAID ALONG WITH DRAFT OFFER DOCUMENT OR IN CASE
SCHEDULE V
[See regulations 6(6) and 101(4)]
MANNER OF SUBMISSION OF SOFT COPY OF DRAFT OFFER DOCUMENT AND OFFER DOCUMENT TO THE BOARD
(1) The soft copies of draft and final offer document shall be submitted in PDF format in a compact disk placed in a sealed envelope.
(2) One compact disk shall contain the draft or final offer document of only one issue and in single file.
(3) While submitting the compact disk, the lead merchant banker shall, inter alia, certify to the Board that the information contained in the compact disk contains all text and data in a systematic order, matches exactly with the contents of the hard copy of the offer document and satisfies the requirements of this Schedule.
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SCHEDULE VI
FORMATS OF DUE DILIGENCE CERTIFICATES
FORM A
1[See regulations 8(1)(c), 10(3)(a) and 4[1060(2)]]
FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY MERCHANT BANKER
ALONG WITH DRAFT OFFER DOCUMENT
To,
Securities and Exchange Board of India
Dear Sirs,
Sub.: Public/Rights Issue of.....................by............................(Name of the Issuer)
We, the lead merchant banker(s) to the above mentioned forthcoming issue, state and confirm as follows:
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SCHEDULE VII
[See regulation 11(4)]
NATURE OF UPDATION/CHANGES IN THE OFFER DOCUMENT AND CONSEQUENT STEPS THEREIN REQUIRING FILING OF UPDATED OFFER DOCUMENT
(1) Changes which require fresh filing of the draft offer document with the Board, along with fees: If changes are made in the offer document with respect to the following, the issuer shall file fresh draft offer document with the Board in terms of regulation 6, along with the fees as specified in Part A of Schedule IV:
(a) Change in promoter or persons in control of the issuer.
(b) Change in more than half of the board of directors of the issuer.
(c) Change in main object clause of the issuer.
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SCHEDULE VIII
[See regulations 14(3), 37(a), 44, 45(1)(f), 57(2)(a), 57(2)(b), 58(1) and 58(2)]
DISCLOSURES IN OFFER DOCUMENT, ABRIDGED PROSPECTUS AND ABRIDGED LETTER OF OFFER
The words "group companies", wherever they occur, shall mean companies, firms, ventures, etc. promoted by the promoters of the issuer, irrespective of whether such entities are covered under section 370 (1)(B) of the Companies Act, 1956 or not.
PART A
[See regulations 14(3), 37(a), 44, 45(1)(f), 57(2)(a)) and 57(2)(b)]
DISCLOSURES IN RED HERRING PROSPECTUS, SHELF PROSPECTUS AND PROSPECTUS
(1) Instructions:
Schedule VIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (ICDR Regulations) outlines the disclosure requirements for companies issuing securities. This schedule is critical for ensuring transparency and protecting investor interests during capital raising activities.
Schedule VIII specifies the mandatory disclosures that must be included in various prospectuses, including the Draft Red Herring Prospectus, Red Herring Prospectus, and Shelf Prospectus. It aims to provide potential investors with comprehensive information about the issuing company.
SCHEDULE IX
[See regulation 16(2)]
FORMAT OF REPORT TO BE SUBMITTED BY MONITORING AGENCY
NAME OF THE MONITORING AGENCY :
MONITORING REPORT FOR THE HALF YEAR ENDED..
(1) Name of the Issuer :
(2) About the issue whose proceeds to be monitored
(a) Issue date :
(b) Type of issue (public/rights) :
(c) Type of specified securities :
(d) Issue size : (Rs----------(in crores)
(e) Amount collected : (Rs.--------(in crores)
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SCHEDULE X
[See Explanation to regulations 26(6), 31, 33(1)(b) and 41(2)(b)]
FACILITIES OR SERVICES INCLUDED IN THE TERM "INFRASTRUCTURE SECTOR"
For the purposes of these regulations, the expression "infrastructure sector" shall include the following facilities/services:
(1) Transportation (including inter modal transportation), including the following:
(a) Roads, national highways, state highways, major district roads, other district roads and village roads, including toll roads, bridges, highways, road transport providers and other road-related services;
(b) Rail system, rail transport providers, metro rail roads and other railway related services;
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SCHEDULE XI
[See regulation 28(3) and 102]
BOOK BUILDING PROCESS
PART A
(1) An issuer proposing to issue specified securities through book building process shall comply with the requirements of this Schedule.
(2) Lead Book Runner.
(a) The issuer shall appoint one or more merchant banker(s) as book runner(s) and their name(s) shall be disclosed in the draft red herring prospectus.
(b) The lead merchant banker shall act as the lead book runner and shall be primarily responsible for the book building.
(c) There shall be only one lead book runner and other merchant bankers app
SCHEDULE XII
[See regulation 45(10)]
FORMAT OF REPORT FOR GREEN SHOE OPTION
The report for Green Shoe Option shall be filed in the following format:-
(1) Name of the issuer:
(2) Name of the Stabilising Agent (Registration No. as merchant banker with SEBI):
(3) Issue size (No. of equity shares):
(4) Issue opened on :
(5) Issue closed on :
(6) Over-allotment in issue (%):
(7) Date of commencement of trading :
(8) Amount in the 'Green Shoe Opt
SCHEDULE XIII
FORMATS OF ADVERTISEMENTS FOR PUBLIC ISSUE
PART A
[See regulations 47(2), 60(7)(m) and 60(7)(n)]
FORMAT OF PRE-ISSUE ADVERTISEMENT FOR PUBLIC ISSUE (FIXED PRICE / BOOKBUILT)
This is only an advertisement for information purposes and not a prospectus announcement.
ABC LTD. (name of the issuer)
(Incorporated on____________________ under the-------Act as_____________________ and subsequently renamed as_____________(if applicable)__________on____________)
Registered Office: __________________________________Tel:
______
The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (ICDR Regulations) were established to regulate the issuance of securities and ensure adequate disclosure to protect investors' interests. Schedule 13 specifically addresses the requirements related to the disclosure of financial information and other pertinent details in offer documents.
Schedule 13 outlines the specific disclosures that must be made in the offer document, including financial statements, risk factors, and management discussions. It aims to provide potential investors with comprehensive information to make informed decisions.
The scope of Schedule 13 extends to all public offerings and rights issues, ensuring that all relevant financial and operational information is disclosed to potential investors. It applies to both listed and unlisted companies seeking to raise capital through public offerings.
Non-compliance with the disclosure requirements outlined in Schedule 13 can lead to penalties, including fines and restrictions on future capital raising activities. The severity of punishment is determined based on the nature of the violation.
SCHEDULE XIV
[See regulation 49(2)]
ILLUSTRATION EXPLAINING MINIMUM APPLICATION SIZE
For inviting applications in multiples of the minimum value as referred to in sub-regulation (2) of regulation 49, the procedure is clarified by following example:
Assuming an issue is being made at a price of Rs.390 per equity share. In this case, the issuer in consultation with the lead merchant banker can determine the minimum application lot within the range of 13 - 17 equity shares (in value terms between Rs.5000- Rs.7000), as explained hereunder:
Options I II III IV V
Lot Size @ Rs.390/- per share 13 shares 14 shares 15 shares 16 shares 17 shares
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SCHEDULE XV
[See regulations 50(2), 1[106] and Schedule XI]
ILLUSTRATION EXPLAINING PROCEDURE OF ALLOTMENT
(1) Total no. of specified securities on offer@ Rs. 600 per share: 10 crore specified securities
(2) Specified securities on offer for retail individual investors' category: 2.5 crore specified securities
(3) The issue is over subscribed 4 times whereas the retail individual investors' category is over subscribed 8.25 times
(4) Issuer decides to fix the minimum application / bid size as 9 specified securities (falling within the range of Rs. 5000 - 7000). Application can be made for a minimum of 9 specified securities and in multiples thereof.
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SCHEDULE XVI
FORMATS OF POST ISSUE REPORTS
PART A
[See regulation 65(2)(a) and 104(2)(a)]
FORMAT OF INITIAL POST ISSUE REPORT FOR PUBLIC ISSUE
Subscription Status: (Subscribed/ Undersubscribed)
Note: It is the responsibility of lead merchant banker to give correct information after verifying it from the issuer and the registrar to the issue.
(1) Name of the Issuer :
(2) Issue opening date :
(3) Earliest closing date :
(4) Actual closing date :
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SCHEDULE XVII
[See regulation 67(4) and 105]
FORMAT OF UNDERWRITING DEVOLVEMENT STATEMENT
(1) Name of the merchant banker :
(2) Name of the issuer :
(3) Issue size :
(4) Issue-wise statement of non-acceptance of underwriting devolvement :
Sr. No. Name of the Underwriter Amount underwritten Amount devolved Date of issue of notice of devolvement, if any Reasons for not accepting devolvement
SCHEDULE XVIII
[See regulation 84(1)]
DISCLOSURES IN PLACEMENT DOCUMENT
(1) Disclaimer to the effect that the Memorandum relates to an issue made to qualified institutional buyers under Chapter VIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations, 2009 and that no offer is being made to the public or any other class of investors.
(2) Glossary of terms/abbreviations
(3) Financial statements contained herein
(4) Merchant bankers/merchant bankers to the placement and other advisors
(5) Summary of the offering and eligible security
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SCHEDULE XIX
[See regulations 103(2)(b) and 103(3)]
DISCLOSURES IN PROSPECTUS AND ABRIDGED PROSPECTUS FOR ISSUE OF INDIAN DEPOSITORY RECEIPTS
PART A
[See regulation 103(2)(b)]
DISCLOSURES IN PROSPECTUS FOR ISSUE OF INDIAN DEPOSITORY RECEIPTS
A prospectus for issue of Indian Depository Receipts (IDR) shall contain all details as specified herein.
(1) GENERAL INSTRUCTIONS WITH RESPECT TO CONTENTS OF THE PROSPECTUS:
(a) The merchant banker has the option to file the draft prospectus as a public filing or a confidential filing, accompanied with fees as prescribed in Rule 5(1)(
SCHEDULE XX
[See regulation 110]
AMENDMENTS TO OTHER REGULATIONS
(1) Amendment of Securities and Exchange Board of India (Debenture Trustee) Regulations, 1993.
(i) in regulation 15,
(a) in sub-regulation (1), after clause (c) the following clause shall be inserted, namely:-
"(ca) supervise the implementation of the conditions regarding creation of security for the debentures and debenture redemption reserve, wherever applicable;"
(b) after sub-regulation (1), the following sub-regulation shall be inserted, namely:-
"(1 A) The debenture trustee shall:
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SCHEDULE XXI
[See regulation 106F(2)]
PART A
DISCLOSURES IN THE ADDENDUM TO THE OFFER DOCUMENT FOR RIGHTS ISSUE OF INDIAN DEPOSITORY RECEIPTS
(1) The listed issuer making a rights issue of IDRs shall make the disclosures as specified in this Part in the form of an addendum to the offer document.
(2) Notwithstanding the above, where disclosures of matters similar or equivalent to those set out in this Schedule are required by home country regulations to be made in a particular form or by reference to particular requirements of such regulations, the same shall prevail over the requirements of this Schedule and shall be deemed to be complied with by disclosures made in the offer document on the basis of the
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