Process For Issue of Non-Convertible Debentures (NCD) On Private Placement Basis by A Listed Company
I] Major Governing Acts, Regulations and Circulars
a) Companies Act, 2013 & Rules made thereunder
b) SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
c) SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021
d) OPERATIONAL CIRCULAR SEBI/HO/DDHS/P/CIR/2021/613
e) SEBI (Debenture Trustee) Regulation, 1993
f) Stamp Act, 1899
II] Eligibility conditions:
A. Eligibility requirements under the Companies Act, 2013:
1. Offer can be made to a maximum of 200 persons;
2. The Company shall not make a fresh offer or invitation unless the allotment with respect to any offer or invitation made earlier have been completed or withdrawn or abandoned by the Company;
3. Period of Redemption shall not exceed 10 years from the date of issue;
4. No fresh offer or invitation for private placement of debentures shall be made unless the allotments with respect to any offer of invitations made earlier have been completed or that offer or invitation has been withdrawn or abandoned by the company
5. Issue shall be in DEAMT form
6. In case of Foreign residents /body corporates the provisions of FEMA needs to be complied
B. Eligibility requirements under SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021
No issuer shall make an issue of non-convertible securities if as on the date of filing of draft offer document or offer document:
(a) the issuer, any of its promoters, promoter group or directors are debarred from accessing the securities market or dealing in securities by the Board;
(b) any of the promoters or directors of the issuer is a promoter or director of another company which is debarred from accessing the securities market or dealing in securities by the Board;
(c) the issuer or any of its promoters or directors is a willful defaulter;
(d) any of the promoters or whole-time directors of the issuer is a promoter or whole-time director of another company which is a willful defaulter;
(e) any of its promoters or directors is a fugitive economic offender; or
(f) any fine or penalties levied by the Board /Stock Exchanges is pending to be paid by the issuer at the time of filing the offer document:
Provided that the:
(i) restrictions mentioned at (b) and (d) above shall not be applicable in case of a person who was appointed as a director only by virtue of nomination by a debenture trustee in other company.
(ii) restrictions mentioned in (a) and (b) above shall not be applicable if the period of debarment is over as on date of filing of the draft offer document with the Board.
(iii) restrictions mentioned at (c) and (d) shall not be applicable in case of private placement of non-convertible securities.
(2) No issuer shall make a public issue of non-convertible securities if as on the date of filing of draft offer document or offer document, the issuer is in default of payment of interest or repayment of principal amount in respect of non-convertible securities, if any, for a period of more than six months.
III] Requirements and Conditions to be fulfilled for making a NCD on private placement basis
|1.||In-principle approval||– Application for in-principal approval to be made to one or more Stock Exchanges
– Choose a designated stock Exchange
|2.||Depositories||– Arrangement with Depositories (NSDL & CDSL) for DEMAT of Securities|
|3.||Debenture Trustee||– Appoint a debenture trustee before the issue of letter of offer for subscription of debentures and not later than 60 days after the allotment of debentures, execute a debenture trust deed to protect the interest thereon
– Names of the debenture trustee shall be stated in the offer document and all subsequent notices or communications sent to debenture holders
– Written consent from the denture trustee shall be obtained
|4.||Registrar to the Issue||– Appoint a Registrar to the Issue, registered with the Board, which has established connectivity with all the depositories|
|5.||Credit rating||– Obtain credit rating from at least one credit rating agency, which shall be disclosed in the offer document|
|6.||Creation of Recovery Expense Fund||– create a recovery expense fund with the designated stock exchange, by depositing such amount and in such form and manner as may be specified by the Board.|
|7.||Regulatory fees||– Regulatory fees as specified in Schedule VI of SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021|
|8.||Day Count Convention||– The day count convention for calculation of interest/dividend payments for non- convertible securities shall be on Actual/Actual.
– All payments required to be made by an issuer shall be made on a working day.
– In case the due date of any amount payable by the issuer falls on a day which is not a working day, such payments shall be made in a manner as specified by the Board.
|9.||Debenture Redemption Reserve/ Capital Redemption Reserve||– create a debenture redemption reserve (DRR) or capital redemption reserve in accordance with the relevant provisions of the Companies Act, 2013 (18 of 2013). (No DRR required in case of private placement of NCD)|
|10.||International Securities Identification Number (ISIN)||– Apply for ISIN and comply with the conditions relating to the issue of International Securities Identification Number|
|11.||Trust Deed||– Company and the debenture trustee shall execute the trust deed
– Penalty applicable in case if the deed is not executed within timelines
|12.||Listing Agreement||– execute an agreement with such stock exchange (Format as per respective stock exchange.|
|13.||Continuous Listing Conditions||– comply with the listing regulations and/or such other conditions and disclosure requirements as may be specified by the Board from time to time|
|14.||Obligations of the Issuer||– Fair and equitable treatment to all applicants
– No employment of any device, scheme, or artifice to defraud in connection with issue or subscription or distribution of non-convertible securities which are listed or proposed to be listed
– Registration in (SCORES)
– Security cover of 100% of the issued securities
|15.||Obligations of Debenture Trustee||– protecting the interest of holders of debt securities including a right to appoint a nominee director on the Board of the issuer
– supervise the implementation of the conditions regarding creation of security for the debt securities
– monitor the security cover in relation to secured debt securities
|16.||Listing Application||– Forward a Listing application to Stock Exchanges along with the following documents
(a) Placement Memorandum;
(b) Memorandum of Association and Articles of Association;
(c) Copy of the requisite board/ committee resolutions authorizing the borrowing and list of authorised signatories for the allotment of securities;
(d) Copy of last three years Annual Reports;
(e) Statement containing particulars of, dates of, and parties to all material contracts and agreements;
(f) An undertaking from the issuer stating that the necessary documents for creation of the charge, wherever applicable, including the Trust Deed has been executed within the time frame prescribed in the relevant regulations/Act/rules etc. and the same would be uploaded on the website of the designated stock exchange, where such securities have been proposed to be listed;
(g) In case of debt securities, an undertaking that permission / consent from the prior creditor for a second or pari passu charge being created, wherever applicable, in favour of the debenture trustee to the proposed issue has been obtained; and
(h) Any other particulars or documents that the recognized stock exchange may call for as it deems fit:
– due diligence certificate from Debenture trustee in the format as specified in Schedule IV of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021
– stock exchange(s) shall list the debt securities only upon receipt of the due diligence certificate from the debenture trustee
|16.||Disclosures in respect of Private Placements||– Disclosures in the placement memorandum AND SHALL be made on the websites of stock exchange(s) where such securities are proposed to be listed and shall be available for download in PDF or any other format as may be specified by the Board
(a) disclosures specified in Schedule II of these regulations;
(b) disclosures specified in the Companies Act, 2013 (18 of 2013), as applicable;
(c) additional disclosures as may be specified by the Board.
– Audited financial statements contained in the placement memorandum and tranche placement memorandum shall not be more than six months old from the date of filing placement memorandum or the issue opening date, as applicable
|17.||Filing of shelf placement memorandum||– Optional|
|18.||Creation of security||– There is an option to create charge or security over the properties or assets (movable, immovable, tangible, intangible), shares or any interest thereon, of the issuer or its subsidiaries or its holding companies or its associate companies.
– Disclosure in Offer document
the assets on which charge or security has been created to meet the hundred percent security cover is free from any encumbrances and in case the assets are encumbered, the permissions or consent to create first, second or pari passu charge on the assets has been obtained from the existing creditors to whom the assets are charged, prior to creation of the charge (This disclosure not required if the charge is is created on additional assets other than the assets comprising of hundred percent security cover)
|19.||Consolidation and re-issuance||– Conditions for Consolidation and re-issuance
(a) the Articles of Association of the issuer shall not contain any provision, whether express or implied, contrary to such consolidation and re-issuance;
(b) the issuer has obtained fresh credit rating for each re-issuance from at least one credit rating agency registered with the Board and is disclosed;
(c) such ratings shall be reviewed on a periodic basis as specified by the Board and the change, if any, shall be disclosed;
(d) appropriate disclosures are made with regard to consolidation and re-issuance in the placement memorandum.
IV] Procedure for allotment of securities NCD on private placement basis
Provisions of Section 180(1) (c) pertaining to borrowing limits must be in compliance
|1.||Reg 29 of SEBI (LODR) Regulations, 2015||– Prior Intimation to Stock Exchange about Board Meeting in which the proposal for issue of NCD is due to be considered atleast 2 working days in advance excluding the date of intimation and date of the meeting.|
|2.||Reg 42, 71, 173 & 179 & Secretarial Standards (SS)||– i) To consider and approve issue of debentures including the terms and conditions of issue for the entire FY in the Board Meeting;
– ii) To authorise the Board Borrowing Committee/ other relevant committee for the following and approve in the meeting:
a. Appointment of RTA and execute tripartite agreement [Reg 9]
b. Appointment of Credit Rating Agency and obtain Credit Rating. [Reg 10]
c. Opening of Separate Bank Account with Schedule Bank [Proviso to Section 42(6)].
d. To identify group of persons to whom Debentures are proposed to be issued [Section 42(2)]
e. To approve Private Placement offer letter
f. Appointment of Depository [Reg 7]
g. For allotment of NCDs
h. other matters relevant to the issue of NCDs
I. To appoint a debenture trustee before the issue of letter of offer for subscription of the debentures [Reg 8]
j. To obtain in-principle approval from stock exchanges [Reg 6]
k. To fix day, date and time and agenda for the EOGM.
l. draft notice of EOGM with explanatory statements for the purpose of passing Special resolution
m. To authorize CS or any other officer to issue notice of EOGM under authority of the Board to every member and every other person entitled to such notice
(Note the approval of shareholders can be sought via postal ballot also)
|3.||Reg. 30 of SEBI (LODR) Regulations, 2015||– To disclose the outcome of Board Meeting within 30 mins of closure of the meeting and post the same on the website of the Company|
|4.||Section 117, 179 read with Rules||– File Copy of the Board Resolution for issue of debentures to the ROC within 30 days in Form MGT -14|
|5.||Section 71, 100 and 110 & SS||– Approval of Shareholders by Special Resolution and details to furnished in the explanatory statement to the notice
– Special Resolution is valid for 1 year
|6.||Reg. 30 of SEBI (LODR) Regulations, 2015||– Submit the disclosure of General Meeting to SE not later than 24 hrs from the conclusion of EOGM and post the same on the website of the company|
|7.||Reg. 44 of SEBI (LODR) Regulations, 2015||– Submit to the Stock Exchange within 2 working days of conclusion of EOGM the voting results in the format specified by SEBI and post the same on the website of the company|
|8.||Section 117 read with Rules||– File the copy of Special Resolution along with explanatory statements within 30 days of passing the resolution to ROC in form MGT-14|
|9.||Procedural||– Preparation and finalization of Disclosure Document & Information Memorandum ;
– Preparation and finalization of Debenture Trust Deed, Debenture Trust Agreement/ Debenture Subscription Agreement. (Note: In case of execution of fresh DTD, CHG-9 is to be filed with the ROC within the prescribed timeline of 30 days and the required detials needs to be updated on the NSDL issuer Service Portal.)
– Obtain consent from Trustee
– Before issue open information memorandum needs to be uploaded on EBP portal for investors.
– Details of assets to be given as security to be inserted on the NSDL Issuer Service Portal.
– Send Master Creation Form (“MCF”) to NSDL and CDSL for creation of ISIN.
– Ensure that ISIN should be allotted before allotment.
– Mapping of ISIN with the assets on NSDL Issuer Service Portal.
– Filing of Master Creation form with NSDL/CDSL -for demat issuance
|10.||Section 42 read with Rules||– Open a Separate Bank Account in a schedule bank for keeping monies received on application
– Record names of the person to whom NCD are offered by way of private placement
– Make Private placement offer letter in PAS -4 .The offer letter must be accompanied by an application and addressed specifically to the persons to whom the offer is made
– The offer shall be sent either in writing or in electronic mode within 30 days of recording the names of such persons (Note: Offer letter must not carry right for renunciation & Offer letter can be issue only after filing of Form MGT – 14 for BR and SR)
– Maintain a complete record of person to whom the offer letter is sent in Form PAS -5 (Note: In Form PAS 5 (Complete record of Private Placement) details, Investor details and Debt Structure which will be required to file PAS 3 (Return of Allotment) (required on the date of allotment).
– Receive the amount of subscription in the bank accounts
|11.||Regulation 10 of SEBI (NCS) Regulations, 2021||– Obtain credit rating from at least one credit rating agency, which shall be disclosed in the offer document & finalize the Term sheet|
|12.||Regulation 7 of SEBI (NCS) Regulations, 2021||– Agreement with Depositories (NSDL & CDSL) for DEMAT of Securities|
|13.||Section 42, 71 and 173 read with Rules and SS||– After closing of Private placement offer, hold a meeting of Board within 60 days from the receipt of application money
a) Approval of draft offer document/ Disclosure Document/Information Memorandum, Debenture Trust Deed, Debenture Trustee Agreement, Application Form
b) Identification of RTA
c) Approval of List of proposed Allotees
d) Approval for opening of Escrow Account (if already opened then noting of the same)
e) All other matter as delegated by the Board as mentioned in Point a above
f) To authorize CS or any other officer to file the Return of Allotment with ROC
g) Issuance of Debenture certificate in favour of NSDL.
h) Creation of recovery expense fund
i) Send Corporate Action Forms to NSDL / CDSL and RTA for credit of NCDs in investor’s demat account on the date of allotment
j) Corporate Action Confirmation from concerned depositories
|14||Reg. 30 of SEBI (LODR) Regulations, 2015||– Intimate to the Stock Exchange about allotment of NCDs under Regulation 30 of SEBI LODR|
|15.||Section 42 read with Rules||– File return of allotment with ROC in form PAS -3 within 15 days of allotment|
|16.||Section 77 or 79 read with Rules||– File particulars of charge with ROC within 30 days of creation of charge in form CHG -9 (Note: It is assumed that the company is providing the security cover for the issue of NCD)|
|18.||Section 85 read with Rules||– Make necessary entries in Register of Charges in Form CHG -7 after registration of creation of charge and authenticated by CS|
|19.||Regulation 13 of SEBI (NCS) Regulations, 2021||– Payment of Fees to Exchange|
|20.||Procedural||– Final application for listing to Stock Exchange on NEAPS/ BSE Listing Centre.|
Note: It is assumed that the company has limits for borrowings or have sought necessary shareholders approval in this regards
V] Fees Schedule & List of Documents to be uploaded on the Listing Centre (Annexures are available on the BSE Listing Portal)
|Sr. No.||Documents to be uploaded on the Listing Centre|
|1.||Listing Application as per Annexure IA|
|2.||Letter of Application as per Annexure IB|
|3.||Listing Agreement (only for the first time Listing with BSE)
(2 Original hard copies on Rs.100/- Stamp paper each to be submitted in case the company is applying for listing for the first time on BSE)
|4.||Certified true copy of Final Placement Memorandum/ Disclosure Document as per SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 and any amendments thereto (Shelf and Tranche if applicable)|
|5.||Approval by the Board of Directors / Committee/ Authorised persons of allotment of securities along with List of allottees Annexure IC|
|6.||Certified copy of credit confirmation letter issued by both Depositories (NSDL& CDSL) confirming credit of securities in respective ISIN|
|7.||Certified copy of the Executed Debenture Trust Deed (Applicable for secured as well as unsecured debentures)|
|8.||Due diligence certificate from debenture trustee as per Annexure B of SEBI Circular No. SEBI/HO/MIRSD/CRADT/CIR/P/2020/218 dated November 03, 2020 and any amendments thereto (Applicable for secured as well as unsecured debentures)
(For Unsecured debentures, kindly write N.A. wherever the relevant or strike-off wherever partially applicable)
|9.||An Undertaking from the Trustee that the Due Diligence Certificate as per Annexure A and B of SEBI circular SEBI/HO/MIRSD/CRADT/CIR/P/2020/218 dated November 03, 2020 are valid for the allotment dated dd/mm/yyyy under ISIN______|
|10.||Confirmation from the Debenture Trustee that they are in possession of the contact details and email id of the investors|
|11.||If BSE is the Designated Stock Exchange, Recovery Expenses Fund, as applicable, in terms of SEBI Circular No. SEBI/HO/MIRSD/CRADT/CIR/P/2020/207 dated October 22, 2020|
|12.||Copy of In- principal approval of other Exchange where the securities are proposed to be listed (if applicable)|
|13.||Confirmation for authentication on SEBI for SCORES|
|14.||Confirmation from issuer as per Annexure II (applicable to all applications for all type of issues)|
|15.||Undertaking as per Annexure III – if there is delay in Listing/Delay in Filing of Application|
|16.||Undertaking as per Annexure IV|
|17.||Creation of Recovery Expense Fund (As per Guidance Note)|
|18.||Undertaking from issuer w.r.t. creation of Recovery Expense Fund if BSE is not the Designated Stock Exchange as per Annexure V|
|19.||Undertaking from Statutory Auditor/PCA/PCS in case Allotment is not done through EBP Mechanism of Stock Exchange as per Annexure VI|
|20.||Additional Confirmation in case of issue of green debt securities on private placement basis as per Annexure VII|
|21.||Additional Confirmation in case of issue of PDIs/ PNCPS/PCPS/RNCPS/RCPS as per Annexure VIII|
|22.||Additional Confirmation in case of issue of Structure/ Market Linked Debt Instruments (MLDs) as per Annexure IX|
|23.||Details of compliance with Chapter XV of SEBI Circular No SEBI/HO/DDHS/P/CIR/2021/613 dated August 10, 2021 to be submitted by issuers of non-convertible securities on private placement basis and for whom accessing the EBP platform is not mandatory as per|
|24.||Issue Details as per Annexure X (not applicable for PPDI)|
|25.||Additional Confirmation from REIT and INVIT as per Annexure XI|
|26.||Regulatory fees as per Schedule VI of SEBI (Issue and Listing of Non-Convertible Instruments) Regulations, 2021|
Confirmations/Information to be provided on the Listing Centre
|1.||Confirmation from the Issuer as per Annexure II|
|4.||Details of further listing /processing fee remitted as per fees schedule|
Note – Issuers are required to submit the listing application, complete and correct in all respects, to the Exchange on BSE Listing portal by 12 p.m., to receive approval from the Exchange on the same working day.
Fees schedule for Listing of Privately Placed Debt Instruments on BSE
|Initial Listing Fees||Rs. 20,000/-|
(Applicable only to Private Companies)
|Rs. Rs.4,500/- per ISIN
(If the parent company is a public limited company or a listed entity – Rs. 2500/- per ISIN)
|Annual Listing Fees Chargeable – Issue Size Per ISIN|
|Up to Rs.5 crore||Rs. 2,750|
|Above Rs.5 crore and up to Rs.10 crores||Rs. 4,000|
|Above Rs.10 crores and up to Rs.20 crores||Rs. 7,750|
|Above Rs.20 crores||Rs. 7,700 plus an additional listing fees of Rs. 200/- for every increase of Rs. 1 crore or part thereof above Rs. 20 Crs
Subject to a maximum of Rs. 30,000/-
|Annual listing fee payable by an Issuer is limited to a maximum of Rs. 5.50 lacs.|
|* Plus Applicable Taxes|
|The above fees shall be applicable on the incremental issues to be listed on and after April 01, 2022, and also to the existing Capital.|
The regulatory fees as per the Securities Exchange Board of India (Payment of Fees) (Amendment) Regulations, 2014 shall also be payable in favour of ‘BSE Limited’.
Brief synopsis of process
The key documents that govern the terms and conditions for NCD issued on a private placement basis are:
1) the debenture trustee appointment agreement. This agreement contains the terms for the appointment of the debenture trustee acting for the benefit of the debenture holders and is executed between the issuer and the debenture trustee;
2) the debenture trust deed. This deed contains the principal terms of the debt issuances and is executed between the issuer and the debenture trustee (acting for the benefit of debenture holders);
3) security documents (where the debt securities are secured). These documents are executed between the entity providing the security (whether the issuer or other third-party security provider) and the debenture trustee (acting for the benefit of debenture holders);
4) the offering document. This document contains the disclosures prescribed under the Indian Companies Act, the SEBI NCS Regulations or the SEBI ICDR Regulations and circulars issued by SEBI and the stock exchanges in relation to the debt securities, as applicable; and
The offering documents issued for listed debt securities are available on the website of the stock exchange where such securities are listed.
|Sr. No.||Issuance Guidelines as per operational circular||Particulars|
|1.||Issuance of NCD||a) The face value of each debt security issued on private placement basis shall be Rs. Ten lakh.
b) The face value of each security mentioned under Chapter V of SEBI NCS Regulations, 2021 and Chapter 13 of this operational circular shall be Rs. One crore.
|2.||Trading of NCD:||a) The face value of the listed NCD issued on private placement basis traded on a stock exchange or OTC basis shall be Rs. Ten lakh.
b) The face value of listed security mentioned under Chapter V of SEBI NCS Regulations, 2021 and Chapter 13 of this operational circular traded on a stock exchange or OTC basis shall be Rs. One crore.
c) The trading lot shall always be equal to face value.
|3.||Primary issuances through EBP platform shall comply with the stipulations provided in this chapter.||1. The following are the eligible participants (i.e. bidders) on the EBP Platform:
a) QIBs as defined under Regulation 2 (ss) of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (hereinafter referred to SEBI ICDR Regulations, 2018).
b) Any non-QIB investor including arranger(s), who/ which has been authorized by the issuer, to participate in a particular issue on the EBP Platform.
2. The following issues of securities shall be made through the EBP platform:
i). A private placement of NCD as per the provisions of SEBI NCS Regulations, 2021, if it is:
a) a single issue, inclusive of green shoe option, if any, of Rs. 100 crore or more;
b) a shelf issue, consisting of multiple tranches, which cumulatively amounts to Rs. 100 crore or more, in a financial year; and
c) a subsequent issue, where aggregate of all previous issues by an issuer in a financial year equals or exceeds Rs. 100 crore.
ii) Issues of NCD on private placement basis, irrespective of issue size, by issuers who are in existence for less than three years, in accordance with Clause 2.3.8 c. of Schedule II to the SEBI NCS Regulations, 2021.
iii) An issuer, if desirous, may choose to access EBP platform for private placement of municipal debt securities or CPs or CDs also.
iv) Issuers of debt securities and NCRPS on private placement basis of issue size less than Rs. 100 crores may also choose to access the EBP platform for such issuances.
|The obligations of issuers are||a) compliance with all requisite laws, rules, regulations, etc. with respect to private placement of securities including ensuring compliance with Section 42 of the Companies Act, 2013
b) Placement Memorandum and term sheet (i.e. summary of important terms and conditions related to an issue) shall be provided to the EBP at least two working days(five days in case of incase of First Time) prior to the issue opening date.
|The disclosure in Placement Memorandum and the term sheet||a) Details of size of the issue and green shoe option, if any, and a range within which such green shoe option, may be retained.
b) Bid opening and closing date.
c) Minimum Bid Lot.
d) Manner of bidding in the issue i.e. open bidding or closed bidding.
e) Manner of allotment in the issue i.e. uniform yield allotment or multiple yield allotment.
f) Manner of settlement in the issue i.e. through clearing corporation or through escrow bank account of issuer.
g) Settlement cycle i.e. T+1 or T+2 day.
– The issuer may choose to disclose estimated cut off yield to the EBP, however the same has to be disclosed at least one hour prior to opening of the bidding for the issue.
– Subsequent to closure of the issue, the issuer shall ensure following details of the issue are provided on the EBP platform:
|Participants||-Participants, prior to entering into the bidding process shall be required to enroll with EBP. Such enrollment of a participant on an EBP will be onetime exercise and shall be valid till the time such enrolment is annulled or rescinded.
-The KYC verification and enrolment of the eligible participants on the EBP platform shall be done in the following manner:
a) KYC verification shall be undertaken by obtaining/ utilizing existing KYCs of clients from KRAs registered with SEBI or on the basis of the guidelines as prescribed by SEBI from time to time.
b) For QIB investors bidding directly or through arranger(s), KYCs and enrolment shall be done by the EBP.
c) For non-QIB investors bidding directly, KYCs shall be done by the issuer and enrolment shall be done by the EBP.
d) For non-QIB investors, which are bidding through arranger(s), KYC and enrolment on EBP shall be ensured by arranger(s).
– All eligible participants shall have access to PM, term sheet and other issue specific information available on EBP.
– Eligible participants bidding, for an amount equal to or more than Rs.15 crore or 5% of the base issue size, whichever is lower, shall bid directly i.e. shall enter the bids directly on EBP platform.
Provided that foreign portfolio investors may bid through their custodians.
– For bids made by an arranger for any particular issue, such arranger shall disclose the following to the EBP at the time of bidding:
a) Specify that whether the bid is proprietary bid or is being entered on behalf of an eligible participant or is a consolidated bid i.e. an aggregate bid consisting of proprietary bid and bid(s) on behalf of eligible participants.
b) For consolidated bid, arranger shall disclose breakup between proprietary bid and bid(s) made on behalf of eligible participants. Further, for bids entered on behalf of eligible participants, following shall be disclosed:
i. Names of such eligible participants;
ii. Category (i.e. QIB or non-QIB); and
iii. Quantum of bid of each eligible participant.
– An arranger shall not bid on behalf of eligible participant for an amount equal to or more than Rs.15 crore or 5% of the base issue size, whichever is lower.
– Pay-in towards the allotment of securities shall be done from the account of the bidder, to whom allocation is to be made.
Provided that for the bids made by the arranger on behalf of eligible participants, pay-in towards allotment of securities shall be made from the account of such eligible participants.
– Pay-in of funds through escrow bank account of issuer: The pay-in of funds towards an issue on EBP shall be permitted either through clearing corporation of stock exchanges or through escrow bank account of an issuer. An issuer, in its PM, shall disclose the manner of funds pay-in so chosen and details thereof. The process of pay-in of funds by investors and pay-out to issuer can be done on either T+1 or T+2 day, where T day is the issue day, and the same shall be disclosed by issuer in PM.
– In case of non-fulfillment of bidding obligations by bidders, such bidders shall be debarred from accessing the bidding platform across all EBPs for a period of thirty days from the date of such default.
– Pay in shall be done through the clearing corporation of stock exchanges, as per their operating guidelines, or through an escrow bank account of the issuer, as mentioned below.
Provided that where the issuer has selected the escrow bank account as the mechanism for pay-in, EBP, pursuant to successful closure of issue, shall share the allocation details with the Registrar to an Issue, associated with the issue.
|Bidding Process||– Bidding timings & period:
a) In order to ensure operational uniformity across various EBP platforms, the bidding on the EBP platform shall take place between 9 a.m. to 5 p.m. only, on the working days of the recognized stock exchanges.
b) The bidding window shall be open for the period as specified by the issuer in the bidding announcement, however the same shall be open for at least one hour.
– Bidding Announcement:
a) Issuer shall make the bidding announcement on EBP at least one working day before initiating the bidding process.
b) Bidding announcement shall be accompanied with details of bid opening and closing time, and any other details as required by EBP from time to time.
c) Any change in bidding time and/ or date by the Issuer shall be intimated to EBP, ensuring that such announcement is made within the operating hours of the EBP, at least a day before the bidding date.
Provided that such changes in bidding date or time shall be allowed for a maximum of two times.
|Bidding and Allotment process||-Bidding process on EBP platform shall be on an anonymous order driven system.
– Bid shall be made by way of entering bid amount in Rupees (INR) and coupon/ yield in basis points (bps) i.e. up to four decimal places.
– Modification or cancellation of the bids shall be allowed i.e. bidder can cancel or modify the bids made in an issue, subject to following:
a) such cancellation/ modification in the bids can be made only during the bidding period;
b) no cancellation of bids shall be permitted in the last 10 minutes of the bidding period; and
c) in the last 10 minutes of the bidding period, only revision allowed would for improvement of coupon/ yield and upward revision in terms of the bid size.
|Standardization of timelines for listing of securities issued on a private placement basis||Refer Chapter VIII of SEBI Circular SEBI/HO/DDHS/P/CIR/2021/613 dated 10 August 2021|