TaxTMI 
TaxTMI 
Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2022
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.... of Part A of Schedule XIII and Schedule XIV shall come into force from April 1, 2022, for issues opening on or after April 1, 2022. 3. In the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, - I. In regulation 2, in sub-regulation (1), (a) in clause (r), i. the words and symbol "or the offer document:" shall be substituted with the words and symbols "the offer document, or the letter of offer:". ii. in the proviso, the words and symbol "or the offer document;" shall be substituted with the words and symbols "the offer document, or the letter of offer;". (b) in clause (mm), the words and symbols "regulation 2(1)(q) of" shall be omitted. (c) in clause (lll), the words "wilful defaulter" wherever it appears, shall be substituted with the words "wilful defaulter or a fraudulent borrower" and the words "wilful defaulters" shall be substituted with the words "wilful defaulters or fraudulent borrowers". II. In regulation 5, in sub-regulation (1), in clause (c), the words and symbol "wilful defaulter." shall be substituted ....
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....ng in concert, less than twenty per cent of pre-issue shareholding of the issuer based on fully diluted basis, shall not exceed more than ten per cent of pre-issue shareholding of the issuer on fully diluted basis; c. for shareholder(s) holding, individually or with persons acting in concert, more than twenty per cent of pre-issue shareholding of the issuer based on fully diluted basis, provisions of lock-in as specified under regulation 17 of these regulations shall be applicable, and relaxation from lock-in as provided under clause (c) of regulation 17 of these regulations shall not be applicable." VI. In regulation 15, (a) in sub-regulation (1), in clause (b), in point (i) of the proviso, the words "if the promoters and alternative investment funds", shall be substituted with the words "if the promoters and alternative investment funds or foreign venture capital investors or scheduled commercial banks or public financial institutions or insurance companies registered with Insurance Regulatory and Development Authority of India". (b) in sub-regulation (1), in clause (b), in point (ii) of the pro....
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....), the following sub-regulation shall be inserted namely, - "(3A) In an issue made through book building process, the allocation in the non-institutional investors' category shall be as follows: (a) one third of the portion available to non-institutional investors shall be reserved for applicants with application size of more than two lakh rupees and up to ten lakh rupees; (b) two third of the portion available to non-institutional investors shall be reserved for applicants with application size of more than ten lakh rupees: Provided that the unsubscribed portion in either of the sub-categories specified in clauses (a) or (b), may be allocated to applicants in the other sub-category of non-institutional investors." (b) in sub-regulation (4), in clause (ii), the sub-clause (i) and (ii) shall be re-numbered as sub-clause (a) and (b). XI. In regulation 40, in sub-regulation (1), the words, numbers and symbols "it shall appoint underwriters in accordance with the Securities and Exchange Board of India (Underwriters) Regulations, 1993" shall be substituted with the words and symbols "it&nb....
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....ent and the offer document, shall not exceed thirty five per cent. of the amount being raised by the issuer: Provided that the amount raised for such objects where the issuer company has not identified acquisition or investment target, as mentioned in objects of the issue in the draft offer document and the offer document, shall not exceed twenty five per cent. of the amount being raised by the issuer: Provided further that such limits shall not apply if the proposed acquisition or strategic investment object has been identified and suitable specific disclosures about such acquisitions / investments are made in the draft offer document and the offer document at the time of filing of offer documents." (b) in sub-regulation (3), the words "wilful defaulter" shall be substituted with the words "wilful defaulter or a fraudulent borrower". XVIII. In regulation 69, sub-regulation (5), in the proviso, the words, numbers and symbols "or the Companies Act, 1956 (to the extent applicable)" shall be omitted. XIX. In regulation 70, in sub-regulation (6), the words "wilful defaulter" shall be substitut....
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....the promoter group or the director of the issuer has settled any alleged violations of securities laws through the settlement mechanism of the Board in the past three years immediately preceding the reference date, then the disclosure of such compliance of the settlement order, shall be made in the letter of offer;" (d) in clause (m), after the word "Further" the word "that" shall be omitted. XXVIII. In regulation 102, in clause (c), the words "wilful defaulter" shall be substituted with the words "wilful defaulter or a fraudulent borrower". XXIX. In regulation 103, sub-regulations (1) and (2), shall be substituted with the following, namely,- "(1) An issuer shall be eligible to make a further public offer, if it has not changed its name in the last one year period immediately preceding the date of filing the relevant offer document: Provided that if an issuer has changed its name in the last one year period immediately preceding the date of filing the relevant offer document, such an issuer shall make further public offer if at least fifty per cent. of the revenue for the preceding one f....
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....In regulation 114, in sub-regulation (2), the words, numbers and symbol "under section 391 to 394 of the Companies Act, 1956" shall be omitted. XXXIII. In regulation 127, after sub-regulation (2), the following proviso shall be inserted namely, - "Provided that the cap of the price band shall be at least one hundred and five percent of the floor price." XXXIV. In regulation 129, after sub-regulation (3), the following sub-regulation shall be inserted namely, - "(3A) In an issue made through book building process, the allocation in the non-institutional investors' category shall be as follows: (a) one third of the portion available to non-institutional investors shall be reserved for applicants with application size of more than two lakh rupees and up to ten lakh rupees; (b) two third of the portion available to non-institutional investors shall be reserved for applicants with application size of more than ten lakh rupees: Provided that the unsubscribed portion in either of the sub-categories specified in clauses (a) or (b) may be allocated to applicants in the other sub-categ....
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....use (f), in the proviso, the words "letter of offer", appearing after the words "are made in the" shall be substituted with the words "the red herring prospectus". (c) clause (h) shall be substituted with the following, namely, - "(h) that no show-cause notices, excluding proceedings for imposition of penalty, 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 or whole time directors, (i) show-cause notice(s) has been issued by the Board or the Adjudicating Officer, in a proceeding for imposition of penalty; 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;" (d) clause (i) shall be substituted with the following, namely, - "(i) if the issuer or the promoter or the promoter group or the director of the issuer has settled any alleged violations of securities laws through the settlement mechanism of....
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.... case may be." XLIII. In regulation 160, (a) in clause (c), after the words "dematerialized form", the following shall be inserted namely,- "before an application seeking in-principle approval is made by the issuer to the stock exchange(s) where its equity shares are listed"; (b) in clause (e), after the words "the Board", the following shall be inserted namely,- "before an application seeking in-principle approval is made by the issuer to the stock exchange(s) where its equity shares are listed"; (c) after clause (e), the following clause (f) shall be inserted namely,- " (f) the issuer has made an application seeking in-principle approval to the stock exchange(s), where its equity shares are listed, on the same day when the notice has been sent in respect of the general meeting seeking shareholders' approval by way of special resolution." XLIV. In regulation 162, (a) the existing text of the regulation shall be numbered as sub-regulation (1); (b) after sub-regulation (1), the following sub-regulation (2) shall be inserted namely,- "(2) Upon exe....
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....e equity shares of the issuer are listed:"; (d) in the existing proviso to sub-regulation (3), after the word "Provided" and before the word "that", the word "further" shall be inserted. XLVI. In regulation 164, (a) in sub-regulation (1), (i) the words "twenty six weeks" appearing after the words "period of" and before the words "or more", shall be substituted by the number and words "90 trading days"; (ii) in clause a, a) the words, "average of the weekly high and low of the" appearing after the word "the" and before the word "volume", shall be substituted by the number, words and symbol "90 trading days'"; b) the words "during the twenty six weeks" appearing after the word "exchange" and before the word "preceding", shall be omitted; (iii) in clause b, a) the words, "average of the weekly high and low of the" appearing after the word "the" and before the word "volume", shall be substituted by the number, words and symbol "10 trading days'"; b) the words "during the two weeks" appearing after the word "exchange" and before the word "prec....
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.... the Articles of Association of the issuer provide for a method of determination which results in a floor price higher than that determined under these regulations, then the same shall be considered as the floor price for equity shares to be allotted pursuant to the preferential issue."; (d) in sub-regulation (4), (i) the existing text of the sub-regulation shall be numbered as clause (a); (ii) in clause (a), a) the words "average of the weekly high and low of the" appearing after the words "less than the" and before the words "volume weighted" shall be substituted by the number, words and symbol "10 trading days'"; b) the words "during the two weeks" appearing after the word "exchange" and before the word "preceding", shall be omitted; c) after clause (a), the following proviso shall be inserted namely,- "Provided that if the Articles of Association of the issuer provide for a method of determination which results in a floor price higher than that determined under these regulations, then the same shall be considered as the floor price for equity shares to be a....
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.... the following regulation 166A shall be inserted namely,- "Other conditions for pricing 166A. (1) Any preferential issue, which may result in a change in control or allotment of more than five per cent. of the post issue fully diluted share capital of the issuer, to an allottee or to allottees acting in concert, shall require a valuation report from an independent registered valuer and consider the same for determining the price: Provided that the floor price, in such cases, shall be higher of the floor price determined under sub-regulation (1), (2) or (4) of regulation 164, as the case may be, or the price determined under the valuation report from the independent registered valuer or the price determined in accordance with the provisions of the Articles of Association of the issuer, if applicable: Provided further that if any proposed preferential issue is likely to result in a change in control of the issuer, the valuation report from the registered valuer shall also cover guidance on control premium, which shall be computed over and above the price determined in terms of the first provis....
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....nsequent to the preferential issue shall be the same as those applicable to the promoters and promoter group under this regulation." LII. After regulation 167, the following regulation 167A shall be inserted namely,- "Pledge of locked-in specified securities 167A. Specified securities, except SR equity shares, held by the promoters and locked-in under the provisions of these regulations, may be pledged as collateral for a loan granted by a scheduled commercial bank or a public financial institution or a systemically important non-banking finance company or a housing finance company: Provided that the loan has been granted to the issuer or its subsidiary(ies) for the purpose of financing one or more of the objects of the issue and pledge of specified securities is one of the conditions for sanction of the loan: Provided further that the lock-in on the specified securities shall continue pursuant to the invocation of the pledge and the entity invoking the pledge shall not be eligible to transfer the specified securities till the lock-in period stipulated in these regulations has expired." ....
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....s "fourth day". LX. In regulation 228, in clause (c), the words "wilful defaulter" shall be substituted with the words "wilful defaulter or a fraudulent borrower". LXI. In regulation 230, after sub-regulation (2), the following sub-regulation (3) shall be inserted, namely, - "(3) The amount for: (i) general corporate purposes, and (ii) such objects where the issuer company has not identified acquisition or investment target, as mentioned in objects of the issue in the draft offer document and the offer document, shall not exceed thirty five per cent. of the amount being raised by the issuer: Provided that the amount raised for such objects where the issuer company has not identified acquisition or investment target, as mentioned in objects of the issue in the draft offer document and the offer document, shall not exceed twenty five per cent. of the amount being raised by the issuer: Provided further that such limits shall not apply if the proposed acquisition or strategic investment object has been identified and suitable specific disclosures about such acquisitions ....
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....IX. Regulation 290A shall be omitted. LXX. In regulation 292, in sub-regulation (1), in clause (e), the words "wilful defaulter" shall be substituted with the words "wilful defaulter or a fraudulent borrower". LXXI. In Schedule II, in clause (1), in sub-clause (a), the words, numbers and symbols, "the Companies Act, 1956 and/or" shall be omitted. LXXII. In Schedule VI, in Part A, (a) under the heading "Applicability", in proviso (a), the word "issue" shall be substituted with the words "public issue" and the words "Part B" shall be substituted with the words "Part D". (b) in Item (1) titled "Cover Pages", point (1), shall be substituted with the following, namely,- : "(1) Front outside cover page shall contain issue and issuer details, details of selling shareholders in tabular format along with their average cost of acquisition and offer for sale details, and other details as may be specified by the Board from time to time." (c) in Item (1) titled "Cover Pages", in point (2) word "outside" shall be substituted with word "inside". (d) in Item (4) titled "Offer ....
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....ord "statutory auditor(s)" shall be substituted with the words "statutory auditor(s) or Chartered Accountants". ii. in point (I), in para (A), in clause (i), in sub-clause (d), the word "auditor" shall be substituted with the words "auditor or Chartered Accountants". iii. in point (I), in para (B), in clause (iii), the words "statutory auditor" appearing after the words "as certified by the" shall be substituted with the words "statutory auditor or chartered accountants, who hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI)". iv. in point (I), in para (B), in clause (iii), the words "statutory auditor of the issuer company" shall be substituted with the words "statutory auditor of the issuer company or chartered accountants, who hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI) appointed by the issuer company.". v. in point (II), in para (A), in clause (i), the word "statutory auditor(s)" shall be substituted with the words "statutory auditor(s) or Chartered&n....
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....lation 19" shall be substituted with the word and number "regulation 56". (l) in Item (17), the words "fast track issue" shall be substituted with the words "fast track public issue" and the words "Part B" shall be substituted with the words "Part D". LXXIII. In Schedule VI, the words "wilful defaulter", where ever it appears, shall be substituted with the words "wilful defaulter or a fraudulent borrower". LXXIV. In Schedule VI, in Part B, (m) in Item (4), in Para (XI) titled "Financial Information of the issuer", i. in clause (B), the word "statutory auditor" appearing after the words "as certified by the" shall be substituted with the words "statutory auditor or chartered accountants, who hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI)". ii. in clause (B), the words "statutory auditor of the issuer company" shall be substituted with the words "statutory auditor of the issuer company or chartered accountants, who hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of....
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....eading "Source of information / certifications considered by Monitoring Agency for preparation of report" shall be inserted after the column "reply" and before the column "Comments of the monitoring Agency". (c) under point. No. 4, in the table (i), a new column with the heading "Source of information / certifications considered by Monitoring Agency for preparation of report" shall be inserted after the column "Item Head" and before the column "Original Cost (as per the Offer Document)". (d) under point. No. 4, in the table (ii), a new column with the heading "Source of information / certifications considered by Monitoring Agency for preparation of report" shall be inserted after the column "Item Head" and before the column "Amount as proposed in the Offer Document". (e) after point No. 4, a new point No. 5 with the heading "Details of utilization of proceeds stated as General Corporate Purpose (GCP) amount in the offer document", shall be inserted. LXXXI. In Schedule XIII, (a) in Part A, (ii) in clause (7), in sub-clause (b), after point (i), the following proviso shall&nbs....
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.... (6) Therefore, the minimum application size for non-institutional investors' is 340 specified securities (i.e. the application value should be more than two lakh rupees and in multiples of one lot (i.e. 20 specified securities) thereof. (7) A total of five hundred investors have applied in the issue under 3(a) category, in varying number of application size i.e. between 17 to 83 lots (340 to 1660 specified securities), based on the maximum application size of up to ten lakh rupees. (8) Out of the five hundred investors, there are five non-institutional investors A, B, C, D and E who have applied as follows: A has applied for 340 specified securities. B has applied for 500 specified securities. C has applied for 1,000 specified securities. D has applied for 1,400 specified securities and E has applied for 1,660 specified securities. (9) As the allotment to a non-institutional investor cannot be less than the minimum application size, subject to availability of shares, the remaining available shares, if any, shall be allotted on a proportionate basis. The actual entitlement shall be as follows: ....
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....ty thousand investors have applied in the issue under 3(a) category, in varying number of application sizes i.e. between 17 - 83 lots (340 to 1660 specified securities), based on the maximum application size of up to ten lakh rupees. (8) As per the allotment procedure, the allotment to non-institutional investors shall not be less than the minimum application size, subject to availability of shares. (9) Since the total number of specified securities on offer to the non-institutional investors' applications under 3(a) is 5,00,000 and the minimum application size is 340 specified securities, the maximum number of non-institutional investors' who can be allotted this minimum application size should be 1,471. In other words, 1,471 applicants shall get the minimum application size and the remaining 48,529 applicants will not get any allotment. The details of the allotment shall be as follows: No. of lots No. of shares at each lot No. of investors applying at each lot Total no. of shares applied for at each lot No. of investors who shall receive lots according to minimum application size (t....
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....7,50,000 15 76 1520 500 7,60,000 15 77 1540 500 7,70,000 15 78 1560 500 7,80,000 15 79 1580 500 7,90,000 15 80 1600 500 8,00,000 15 81 1620 500 8,10,000 15 82 1640 500 8,20,000 15 83 1660 500 8,30,000 15 TOTAL 50,000 4,48,50,000 1,471 NOTE: For applications under category 3(b), calculation methodology shall be similar to above." LXXXIII. In Schedule XVI, (a) in clause (1), word and symbol "Schedule IV" shall be substituted with the word and symbol "Schedule III". (b) in clause (2), in sub-clause (a) the word and symbol "Schedule IV" shall be substituted with the word and symbol "Schedule III". AJAY TYAGI, Chairman [ADVT.-III/4/Exty./579/2021-22] Footnotes: 1. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 was published in the Gazette of India on September 11, 2018, vide notification No. SEBI/LAD-NRO/GN/2018/31. 2. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Re....