The Securities and Exchange Board of India (SEBI) has published amendments to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, following expert recommendations and public feedback.
According to the stock exchange regulator, these changes will simplify capital issuance and enhance regulatory compliance.
Under the amendments, additional promoter group members and significant non-individual shareholders will be able to cover shortfalls in the minimum promoter contribution (MPC). Compulsory Convertible Securities held for over a year can now be included in MPC calculations if fully disclosed and converted to equity shares before filing the red herring prospectus.
Changes to the issue size in the draft red herring prospectus will be based on rupee value for fresh issues and unit count for offers for sale. Companies can now use unaffected share prices for private placements if market rumours are confirmed within 24 hours. According to the SEBI, this will prevent inflated floor prices arising out of speculative movements.
The mandatory extension for bidding periods during force majeure events is reduced from three days to one. Additionally, the requirement for issuers to place a refundable security deposit of 1% of the issue size has been removed.
