Insights
Relaxation of compliances under ICDR regulations regarding validity of SEBI observations & rights issues
April 22, 2020- One-time relaxation with respect to the validity of SEBI observations, as under:
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- A public issue/rights issue may be opened within twelve months from the date of issuance of observations by SEBI, in terms of Regulation 44(1), 85 and 140. The validity of the SEBI Observations which have expired or will expire between 1 March 2020 and 30 September 2020 has been extended by 6 months from the date of expiry, subject to an undertaking from the lead manager confirming compliance with Schedule XVI of the ICDR Regulations while submitting the updated offer document to the Board.
- An issuer shall be permitted to increase or decrease the fresh issue size by up to 50% of the estimated issue size without requiring to file fresh draft offer document with the Board, provided that (1) there has been no change in the objects of the issue; (2) the lead manager undertakes that the draft offer document is in compliance with provisions of Regulation 7(1)(e); and (3) the lead manager ensures that all appropriate changes are made to the relevant section of DRHP and an addendum, in this regard, shall be made public. This relaxation is applicable to IPO/ Rights Issues/ FPO opening before 31 December 2020.
To refer to the circular dated 21 April 2020, click here.
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- Temporary relaxations with respect to Rights Issues that open on or before 31 March 2021, as under:
- The minimum subscription to be received in the issue u/r 86(1) has been reduced to at least seventy-five per cent (earlier ninety percent) of the offer. Provided that if the issue is subscribed between 75% to 90%, issue will be considered successful subject to the condition that out of the funds raised atleast 75% of the issue size shall be utilized for the objects of the issue other than general corporate purpose.
- The minimum threshold required for not filing draft letter of offer with SEBI has been increased to Rs. Twenty Five crores from Rs. Ten crores, subject to the eligibility and general conditions as specified in Regulations 61 and 62.
- The eligibility conditions with respect to Fast Track Rights Issues have been relaxed u/r 99. Amongst others, the period of three years immediately preceding the reference date in relation to listing of the equity shares of the issuer on any stock exchange, compliance with equity listing agreement and LODR regulations and no suspension from trading has been reduced to eighteen months immediately preceding the reference date under sub-regulations(a), (f) and (j), respectively; Further, the average market capitalisation of public shareholding of the issuer has been reduced to at least one hundred crore rupees in place of two hundred and fifty crore rupees;
The relaxations are, however, not applicable for issuance of warrants.
To refer to the circular dated 21 April 2020, click here.
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