The Securities and Exchange Board of India (SEBI) has the regulatory requirements on issuing capital and disclosures. The regulations came into effect on 3 March 2025, while those on a listed issuer’s rights issue took effect on 31 March 2025.
The changes bridge the gap between regulations and the everyday issues faced in the industry.
It is now mandatory for an issuer to publish an advertisement prior to a listing in wide-circulation newspapers in English, Hindi and regional languages. The regional language shall be as per the location of the registered office of the issuer. This means there are now two mandatory advertising requirements, pre-issue and post-issue in the same newspapers.
An issuer now needs to comply with the filing of additional information when submitting their draft letter with the stock exchange and when filing their offer letter with the SEBI and the stock exchange.
A “specific investor” has now been defined as an eligible investor, whose name must be disclosed by the issuer. The issuer must also name the promoter, the number of rights renounced/intended allotment and the place of the renouncement/allotment. Applications must be made before 11am on the first day of issue and they cannot be withdrawn.
The SEBI will specify the timeframe for the opening and closure of capital issues. In addition, promoters also need to ensure that any pre-issue transactions disclosed in the draft offer letter are reported to the stock exchange within 24 hours. Promoters also need to now offer an exit to dissenting shareholders.
