(1) SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018
(A) Conditions for Objects of the Issue:
i. Where the issuer company in its offer documents, set out an object for future inorganic growth but has not identified any acquisition or investment target, the amount for such objects and amount for general corporate purpose (GCP) shall not exceed 35% of the total amount being raised.
ii. The amount so earmarked for such objects where the issuer company has not identified acquisition or investment target, as mentioned in objects of the issue in the draft offer document and the offer document, shall not exceed 25% of the amount being raised by the issuer.
iii. Above limits shall not apply if the proposed acquisition or strategic
investment object has been identified and suitable specific disclosures about such acquisitions or investments are made in
the draft offer document and the offer document at the time of filing of offer documents.
(B) Conditions for offer for Sale (OFS) to public in an IPO where DRHP is filed by issuer without track record i.e. under Regulation 6(2) of ICDR Regulations, 2018:
i. Shares offered for sale by selling shareholders, individually or with persons acting in concert, holding more than 20% of pre-issue shareholding of the issuer, shall not exceed more than 50% of their pre-issue shareholding.
ii. Shares offered for sale by selling shareholders, individually or with persons acting in concert, holding less than 20% of pre-issue shareholding of the issuer, shall not exceed more than 10% of pre-issue shareholding of the issuer.
c. Monitoring Agency and reporting on utilization of issue proceeds:
i. Credit Rating Agency (CRAs) registered with the Board, shall permitted to act as Monitoring Agency instead of Scheduled Commercial Banks (SCBs) and Public Financial Institutions (PFI).
ii. Such a monitoring shall continue till 100% utilization of issue proceeds.
iii. Amount raised for GCP shall also be brought under monitoring and utilization of same shall be disclosed in monitoring agency report.
iv. Monitoring agency report shall be placed before audit committee for consideration “on a quarterly basis”.
∆ Price Band: In case of book built issues, a minimum price band of be at least 105% of the floor price shall be applicable for all issues opening on or after notification in the official gazette.
∆ Lock-in for Anchor Investors: The existing lock in of 30 days shall continue
for 50% of the portion allocated to anchor investor and for the remaining portion, lock in of 90 days from the date of allotment shall be applicable for all issues opening on or after April 01, 2022.
∆ Revised allocation methodology for Non Institutional Investors (NIIs):
a. For book built issues opening on or after April 01, 2022, the allocation in the NII category shall be revised as follows:
i. one third of the portion available to NIIs shall be reserved for applicants with application size of more than INR 2 Lakh and up to INR 10 Lakh;
ii. two third of the portion available to NIIs shall be reserved for applicants with application size of more than INR 10 Lakh.
b. Allotment of securities in case of NII category shall be on ‘draw of lots’, as is currently applicable for retail individual investors (RIIs) category.
(2) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
∆ Following provision shall be inserted:
✓ Appointment or a re-appointment of any person, including as a managing director or a whole-time director or a manager, who was earlier rejected by the shareholders at a general meeting, shall be done only with
the prior approval of the shareholders.
✓ Among others, following regulations were also amended:
(1) SEBI (Alternative Investment Funds) Regulations, 2012
(2) SEBI (Mutual Funds) Regulations, 1996
(3) Securities and Exchange Board of India (Stock Brokers) Regulations, 1992 and SEBI (Depositories and Participants) Regulations, 2018
(4) SEBI (Foreign Portfolio Investors) Regulations, 2019
(5) Securities and Exchange Board of India (Settlement Proceedings) Regulations, 2018
✓ To read more about amendments, please click here.
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