SEBI Relaxations from ICDR Regulations, 2018 in respect of Rights Issue

Relaxation Particulars

Relaxations

Relaxations with respect to the eligibility conditions related to Fast Track Rights Issues:

a) Unless otherwise specified, nothing contained in sub-regulations (1), (2), (4) and (5) of the Regulation 71 shall apply if the issuer satisfies the conditions mentioned under Regulation 99 of ICDR Regulations for making a rights issue through the fast track route.

b) Certain temporary relaxations with respect to Regulation 99 of ICDR Regulations are extended as follows:

• In regulation 99(a) the words ‘three years’ shall be read as ‘eighteen months’

• In regulation 99(c) the words ‘two hundred and fifty crores’ shall be read as ‘one hundred crores’

• In regulation 99(f) and its proviso the words ‘three years’ shall be read as ‘eighteen months’

• (iv) Regulation 99(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:

• a show cause notice(s) has been issued by the Board in an adjudication proceeding or

• 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 letter of offer.

• Regulation 99 (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”

• In regulation 99 (j) the words ‘three years’ shall be read as ‘eighteen months’

• Regulation 99 (m) shall be read as “For audit qualifications, if any, in respect of any of the financial years for which accounts are disclosed in the letter of offer, the issuer shall provide the restated financial statements adjusting for the impact of the audit qualifications. Further, that for the qualifications wherein impact on the financials cannot be ascertained the same shall be disclosed appropriately in the letter of offer.'

Relaxation with respect to Minimum Subscription:

Regulation 86(1) shall be read as under-

The minimum subscription to be received in the issue shall be at least seventy- five per cent of the offer through the offer document. Provided that if the issue is subscribed between 75% to 90%, issue will be considered successful subject to the condition that out of the funds raised at least 75% of the issue size shall be utilized for the objects of the issue other than general corporate purpose.

Relaxation with respect to the minimum threshold required for not filing draft

letter of offer with SEBI:

In regulation 3(b), proviso to regulation 3 and in regulation 60, the words ‘ten crores’ shall be read as ‘twenty-five crores’.

The eligibility and general conditions as specified in Regulation 61 & 62 respectively shall continue to apply.