Securities and Exchange Board of India (SEBI) in the exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992, vide notification / Circular No. SEBI/HO/CFD/CIR/CFD/DIL/85/2020 issued and publish dated 09th June 2020, has published “Relaxations from certain provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 in respect of Further Public Offer”.
The Circular is issued to :
- All Recognized Stock Exchanges and
- All Registered Merchant Bankers
Previous Relaxations: (vide circular dated 21st April, 2020)
SEBI vide Circular no. SEBI/HO/CFD/CIR/CFD/DIL/67/2020 dated April 21, 2020 introduced temporary relaxation in eligibility conditions related to Fast Track Rights Issue.
Further Relaxations: (vide circular dated 09th June, 2020)
In view of the situation arising due to COVID-19 pandemic and extended lockdown period, it has been decided to provide similar relaxations in the eligibility conditions related to Fast Track Further Public Offer (FPO) as contained in the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“ICDR Regulations) as follows:
- Following Regulations shall not apply if the issuer satisfies the conditions mentioned under Regulation 155 of ICDR Regulations for making a further public offer through the fast track route:
Regulation 123 of SEBI (ICDR) Regulations: Filing of the draft offer document and offer documents
(2) The lead manager(s) shall submit the following to the Board along with the draft offer document:
(3) The issuer shall also file the draft offer document with the stock exchange(s) where the specified securities are proposed to be listed, and shall submit to the stock exchange(s), the Permanent Account Number, bank account number and passport number of its promoters where they are individuals, and Permanent Account Number, bank account number, company registration number or equivalent and the address of the Registrar of Companies with which the promoter is registered, where the promoter is a body corporate.
(4) The Board may specify changes or issue observations on the draft offer document within a period of thirty days from the later of the following dates:
(5) If the Board specifies changes or issues observations on the draft offer document, the issuer and the lead manager(s) shall carry out such changes in the draft offer document and shall submit to the Board an updated draft offer document complying with the observations issued by the Board and highlighting all changes made in the draft offer document before registering or filing the offer documents with the Registrar of Companies or the appropriate authority, as applicable.
(9) The lead manager(s) shall submit the following documents to the Board after issuance of observations by the Board or after expiry of the period stipulated in sub-regulation (4) of regulation 123 if the Board has not issued observations:
Relaxations with respect to Regulation 155 of ICDR Regulations
|Existing Regulations||Revised as per this new circular|
average market capitalisation of public shareholding of the issuer is at least One Thousand crore rupees in case of public issue
|In regulation 155(c) the words ‘one thousand crore’ shall be read as ‘five
Regulation 155(h) shall be read as under:
no show-cause notices have been issued or prosecution proceedings have been initiated by the Board and pending against the issuer or its promoters or whole-time directors as on the reference date;
SEBI has notified more provisions under this clause vide new Amendments.
|Regulation 155(h) shall be read as under:
“no show-cause notices, excluding under adjudication proceedings, have been issued by the Board and pending against the issuer or its promoters or whole-time directors as on the reference date;
In cases where against the issuer or its promoters/ directors/ group companies,
i) a show cause notice(s) has been issued by the Board in an adjudication proceeding or
ii) prosecution proceedings have been initiated by the Board;
necessary disclosures in respect of such action (s) along-with its potential adverse impact on the issuer shall be made in the offer document
Regulation 155 (i)
issuer or promoter or promoter group or director of the issuer has not settled any alleged violation of securities laws through the consent or settlement mechanism with the Board during three years immediately preceding the reference date;
|Regulation 155 (i) shall be read as “the issuer or promoter or promoter group or director of the issuer has fulfilled the settlement terms or adhered to directions of the settlement order(s) in cases where it has settled any alleged violation of securities laws through the consent or settlement mechanism with the Board”
Regulation 155 (l)
impact of audit qualifications, if any and where quantifiable, on the audited accounts of the issuer in respect of those financial years for which such accounts are disclosed in the letter of offer does not exceed five per cent. of the net profit or loss after tax of the issuer for the respective years
|Regulation 155 (l) shall be read as “impact of audit qualifications, if any and where quantifiable, on the audited accounts of the issuer in respect of those financial years for which such accounts are disclosed, shall be appropriately disclosed and accounts accordingly restated, in the offer documents. Further, that for the qualifications wherein impact on the financials cannot be ascertained the same shall be disclosed appropriately in the offer documents.”|
Key Points about this Circular:
- Time Period: These temporary relaxations are applicable for FPOs that open on or before March 31, 2021.
- Applicability of this circular: This circular shall come into force with immediate effect.
- Non – Applicability of this Circular: The relaxations mentioned in this circular are not applicable for the issuance of warrants.
IN NO EVENT THE AUTHOR SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM OR ARISING OUT OF OR IN CONNECTION WITH THE USE OF THIS INFORMATION.