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of <h1>SEBI Regulation: Promoters Must Hold 20% Post-Issue Capital; Shortfall Can Be Met Without Promoter Label</h1> The Securities and Exchange Board of India (SEBI) regulations mandate that promoters of an issuer must hold at least 20% of the post-issue capital. If the promoters' share falls short, certain entities may contribute up to 10% to meet the shortfall without being labeled as promoters. The contribution can be in the form of equity shares or convertible securities. For convertible securities, the contribution price cannot be lower than the weighted average price. Promoters must meet these requirements before the issue opens, with contributions held in escrow if necessary. Specific provisions apply for convertible debt instruments and partly paid shares, ensuring transparency and accountability in the use of funds.
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