On 17-5-2024, the Securities and Exchange Board of India issued Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2024 to amend the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018. The provisions came into force on 17-5-2024.
Key Points:
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Regulation 14 relating to “Minimum Promoter’s Contribution” has been revised amending the condition when the post issue shareholding of the promoters is less than 20%.
Earlier, alternative investment funds or foreign venture capital investors or scheduled commercial banks or public financial institutions or insurance companies registered with Insurance Regulatory and Development Authority of India were allowed to contribute to meet the shortfall in minimum contribution to the extent of 10%.
Now, along with the above-mentioned, any non-individual public shareholder holding at least 5% of the post-issue capital or any entity, individual or non-individual, forming part of promoter group other than the promoter will be able to contribute to meet the shortfall in minimum contribution subject to a maximum of 10% of the post-issue capital without being identified as promoter.
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Regulation relating to “Securities ineligible for minimum promoters’ contribution” has been revised and a new provision has been inserted which says that in case of conversion or exchange of fully paid- up compulsorily convertible securities, full disclosures of conversion or exchange should be made in the draft offer document. This document should be prepared after the conversion or exchange of fully paid-up compulsorily convertible securities is held for at least 1 year.
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The Regulations relating to “Security Deposit” have been omitted.
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The minimum days for which the bidding can be extended, in case of force majeure, banking strike or similar circumstance, has been revised from “three working days” to “one working day”.
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The adjustments in pricing will also depend on effect on the price of the equity shares of the issuer due to material price movement and confirmation of reported event or information may be excluded as per the framework specified Regulation 30(11) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 for determination of the price for a preferential issue.
