Sebi amends rule to facilitate ease of doing biz for companies planning IPOs | IPO Information

To facilitate ease of doing enterprise for firms planning IPOs, Sebi has mentioned any change within the dimension of supply on the market (OFS) requiring recent submitting can be primarily based on solely one of many standards — both difficulty dimension in rupee or variety of shares.

Additional, promoter group entities and non-individual shareholders holding greater than 5 per cent of the post-offer fairness share capital might be permitted to contribute in the direction of the shortfall in minimal promoters’ contribution (MPC) with out being recognized as a promoter, in keeping with a notification issued by Sebi.

Corporations promoted by entrepreneurs usually have a number of rounds of funding previous to itemizing their fairness shares on the inventory exchanges. In such conditions, the promoters’ holding might fall wanting the minimal promoter contribution i.e., 20 per cent of the post-offer fairness share capital.

Whereas the present ICDR (Situation of Capital and Disclosure Necessities) rule permits sure classes of traders to contribute fairness shares held by them in the direction of the shortfall, additional flexibility has been offered.

As well as, fairness shares from the conversion of compulsorily convertible securities held for a 12 months earlier than submitting the draft crimson herring prospectus (DRHP) are to be thought-about for assembly MPC necessities.

Additionally, Sebi has offered flexibility in extending the bid time limit on account of drive majeure occasions similar to banking strikes or comparable circumstances by a minimal of at some point as an alternative of the current requirement of a minimal of three days, as per the notification issued on Might 17.

To provide this impact, the Securities and Change Board of India (Sebi) has amended ICDR guidelines.

First Printed: Might 21 2024 | 4:17 PM IST