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The Securities and Exchange Board of India (SEBI), in exercise of its statutory powers under Section 30 of the SEBI Act, 1992, has introduced amendments to the  Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, vide its notification dated March 3, 2025. These amendments, collectively termed the SEBI (ICDR) (Amendment) Regulations, 2025, aim to enhance transparency, improve disclosure standards, and streamline capital-raising mechanisms in the securities market. The changes introduced are pivotal for listed entities, market intermediaries, and investors, as they refine provisions relating to rights issues, offer documents, pre-IPO placements, and promoter disclosures.

An endeavour has been made for comprehensive and comparative analyses of the SEBI (ICDR) Amendment Regulations, 2025 pertaining to right issue (Chapter III of SEBI ICDR Regulation) of the listed entities, highlighting the key regulatory changes, their impact on capital markets, and their implications for various stakeholders as under:

Sr. No. Regulation Existing Provision New Amendment Impact and implication
1 Clause (e) of Regulation 2, in sub-regulation (1) “associate” means a person which is an associate of the issuer and as defined under the Companies Act, 2013 “associate” shall mean a person or any entity which is an associate under sub-section (6) of section 2 of the Companies Act, 2013 or under the applicable accounting standards It will provide proper interpretation of the word “associate”
2 Clause (m) of Regulation 2, in sub-regulation (1) “draft letter of offer” means the draft letter of offer filed with the Board in relation to a rights issue under these regulations “draft letter of offer” means the draft letter of offer filed with the Stock Exchange in relation to a rights issue under these regulations the word “Board” shall be substituted with the words and symbols “stock exchange(s)”. It empowers stock exchange (instead of SEBI) to review and grant approval for draft letter of offer.
3 Clause (o) of Regulation 2, in sub-regulation (1) No provision for financial year After clause (o), the following clause shall be inserted, namely:

“(oa) “financial year” shall have the same meaning as assigned to it under sub-section (41) of section 2 of the Companies Act, 2013;”

It will provide clarity to the issuer for uniform financial year
4 Clause (b) of Regulation 3 a rights issue by a listed issuer; where the aggregate value of the issue is [fifty crore] rupees or more a rights issue by a listed issuer;

In clause (b), after the words and symbol “by a listed issuer;” the words and symbol “where the aggregate value of the issue is fifty crore rupees or more;” shall be omitted.

The Stock exchange is empowered to review and approve case of Right issue even if, its more than fifty crore.
5 Proviso of Regulation 3 Provided that in case of rights issue of size less than [fifty crores] rupees, the issuer shall prepare the letter of offer in accordance with requirements as specified in these regulations and file the same with the Board for information and dissemination on the Board’s website. Provided that in case of rights issue, the issuer shall prepare the letter of offer in accordance with requirements as specified in these regulations and file the same with the Board for information and dissemination on the Board’s website.

(The first proviso shall be omitted)

The issuer shall file right issue documents with Stock exchange for review and approval as well with the SEBI for information and dissemination irrespective of the size of the right issue.
6 Clause (a) of Regulation 5 in sub-regulation (2) No provisions for outstanding stock appreciation rights granted to employees After clause (a), the following clause shall be inserted namely:

(b) outstanding stock appreciation rights granted to employees pursuant to a stock appreciation right scheme, which are fully exercised for equity shares prior to the filing of the red herring prospectus (in case of book-built issues) or the prospectus (in case of fixed price issues), as the case may be, disclosures regarding such stock appreciation rights and the scheme and the total number of equity shares resulting from the exercise of such rights are made in the draft offer document and offer document.

(the existing clause (b) shall be re-numbered as clause (c))

It tightens disclosures requirement for outstanding stock appreciation rights granted to employees pursuant to a stock appreciation right scheme
7 Regulation 60 Unless otherwise provided in this Chapter, an issuer offering specified securities of aggregate value of fifty crores rupees or more, through a rights issue shall satisfy the conditions of this Chapter at the time of filing the draft letter of offer with the Board and also at the time of filing the final letter of offer with the stock exchanges, as the case may be Unless otherwise provided in this Chapter, an issuer offering specified securities through a rights issue shall satisfy the conditions of this Chapter at the time of filing the draft letter of offer with the stock exchange(s), and at the time of filing the letter of offer with the Board and the stock exchange(s). The amendment removes the ₹50 crore threshold, implying that the conditions under this Chapter now apply to all rights issues, regardless of size.

This broadens the scope of regulatory compliance, ensuring that smaller rights issues are also governed under the same framework.

The change enhances investor protection by enforcing uniform regulatory scrutiny on all rights issues, rather than only on those exceeding ₹50 crores.

Filing Requirement

The draft letter of offer is now required to be filed with the stock exchange(s) instead of SEBI in the first instance.

The final letter of offer must be filed with both SEBI and the stock exchanges instead of just the stock exchanges.

This restructuring aligns the review process with market practices by ensuring that stock exchanges are directly involved in scrutinizing offer documents at an earlier stage.

SEBI’s role is now emphasized at the stage of filing the final letter of offer, ensuring comprehensive regulatory review before the issue proceeds.

This ensures dual-level oversight, first at the stock exchange level for preliminary compliance, and subsequently at SEBI for final approval.

By making the stock exchange the primary recipient of the draft letter of offer, issuers may benefit from quicker turnaround times in the approval process.

This decentralized approach allows stock exchanges to take a more active role in scrutinizing rights issues before final SEBI approval.

8 Regulation 61 In clauses (b) and (c), the symbol “.” shall be substituted with the symbol “;” In clauses (b) and (c), the symbol “.” shall be substituted with the symbol “;” This amendment is purely a grammatical and formatting update, likely intended to allow for present and future modifications in the subsequent paragraph or additions to the ineligibility criteria. It does not impact the substantive meaning of the regulation, nor does it change the existing legal obligations or restrictions on issuers. However, the change signals potential future amendments where SEBI may introduce additional disqualifications for rights issues.
9 Regulation 61 No clause after (c) (d) if the equity shares of the issuer are suspended from trading as a disciplinary measure as on the reference date The introduction of clause 61(d) is a progressive step towards enhancing investor protection and maintaining market discipline. It ensures that companies with trading suspensions due to disciplinary actions cannot access capital markets until their compliance issues are resolved. This change strengthens SEBI’s oversight, reinforces corporate governance norms, and aligns with global best practices in securities regulation.
10 Regulation 61 in Explanation The restrictions under (a) and (b) above will not apply to the persons or entities mentioned therein] who were debarred in the past by the Board and the period of debarment is already over as on the date of filing of the draft letter of offer with the Board The restrictions under (a) and (b) above will not apply to the persons or entities mentioned therein who were debarred in the past by the Board and the period of debarment is already over as on the date of filing of the draft letter of offer with the stock exchange(s) The word Board has been replaced with the word Stock Exchange, empowering stock exchange to process the case of right issue irrespective of size of issue.
11 In sub-regulation 2A of Regulation 62 91(2A) 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 / investments are made in the draft offer document and the offer document at the time of filing of offer documents.

91(2A) 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 letter of offer and the letter of offer,

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 letter of offer and the letter of offer, 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 letter of offer and the letter of offer at the time of filing of offer documents.

(in sub-regulation 2A, the words “draft offer document and the offer document”, wherever they appear, shall be substituted with the words “draft letter of offer and the letter of offer” respectively;)

This amendment is a terminological refinement that aligns the regulation with rights issue terminology by replacing “offer document” with “letter of offer”. While no substantive changes have been made, this clarification eliminates confusion, enhances regulatory consistency, and ensures that rights issue provisions are distinctly applied. It is a positive step towards streamlining disclosure requirements and improving compliance efficiency.
12 In sub-regulation 3 of Regulation 62 (3) Where the issuer or any of its promoters or directors is a 92[wilful defaulter or a fraudulent borrower], the promoters or promoter group of the issuer shall not renounce their rights except to the extent of renunciation within the promoter group. (3) Where the issuer or any of its promoters or directors is a 92[wilful defaulter or a fraudulent borrower], the promoters or promoter group of the issuer shall not renounce their rights except to the extent of renunciation within the promoter group or to the specific investor(s) as disclosed by the issuer in terms of these regulations

(in sub-regulation 3, after the words “renunciation within the promoter group”, the words and symbol “or to the specific investor(s) as disclosed by the issuer in terms of these regulations” shall be inserted.)

Previously, renunciation of rights by promoters or promoter groups in case of wilful default or fraudulent borrowing was restricted only within the promoter group.

The amendment expands this by allowing renunciation to specific investors, provided these investors are disclosed in the offer documents as per SEBI regulations.

Enhanced Flexibility for Capital Raising

This change offers more flexibility to promoters of companies classified as wilful defaulters or fraudulent borrowers by enabling them to bring in external investors.

It ensures that such issuers are not completely restricted from raising funds through a rights issue, thereby allowing potential restructuring opportunities. The amendment ensures that any renunciation to specific investors is disclosed in advance in the offer documents.

This prevents arbitrary or opaque transfers, ensuring that only pre-approved, disclosed investors are allowed to receive renounced rights. It enhances investor protection by ensuring that only credible investors participate in such renunciations.

By limiting renunciations to only specific disclosed investors, SEBI prevents the misuse of renunciation rights while still enabling fresh capital infusion.

This amendment helps distressed issuers find potential backers without violating market discipline.

13 In title to Part IV PART IV – 94[APPOINTMENT OF LEAD MANAGERS AND OTHER INTERMEDIARIES] PART IV – 94[APPOINTMENT OF INTERMEDIARIES] The amendment removes the specific mention of “Lead Managers”, thereby broadening the scope of Part IV to cover all intermediaries equally. This change ensures regulatory flexibility, uniform treatment of market participants, and adaptability to future market developments without altering the core compliance framework.
14 Regulation 69 (1) The issuer shall appoint one or more merchant bankers, which are registered with the Board, as lead manager(s) to the issue.

(2) Where the issue is managed by more than one lead manager, the rights, obligations and responsibilities, relating inter alia to disclosures, allotment, refund and underwriting obligations, if any, of each lead manager shall be predetermined and be disclosed in the draft letter offer and the letter of offer as specified in Schedule I:

(3) At least one lead manager to the issue shall not be an associate (as defined under the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992) of the issuer and if any of the lead manager is an associate of the issuer, it shall disclose itself as an associate of the issuer and its role shall be limited to marketing of the issue.

(1), (2) and (3) Shall be omitted The omission of Regulation 69(1), (2), and (3) marks a significant departure from previous regulatory norms. While it reduces compliance burdens and costs for issuers, it also removes an essential layer of oversight previously provided by lead managers. This amendment places more responsibility on issuers to ensure compliance, which could increase risks for investors.
15 Sub-regulation (4) of Regulation 69 (4) The issuer shall, in consultation with the lead manager(s), appoint other intermediaries which are registered with the Board after the lead manager(s) have independently assessed the capability of other intermediaries to carry out their obligations. (4) The issuer shall appoint intermediaries which are registered with the Board after assessing the capability of intermediaries to carry out their obligations. This amendment removes the lead manager’s role in appointing intermediaries, shifting full responsibility to the issuer. While it provides greater flexibility and efficiency, it also raises concerns about due diligence and regulatory compliance. Issuers will now have greater autonomy but also higher accountability.
16 Sub-regulation (5) of Regulation 69 (5) The issuer shall enter into an agreement with the lead manager(s) in the format specified in Schedule II and also enter into agreements with other intermediaries as required under the respective regulations applicable to the intermediary concerned (5) The issuer shall enter into an agreement with the intermediaries as required under the respective regulations applicable to the intermediary concerned This amendment removes the mandatory agreement with lead managers, giving issuers more control over their intermediary relationships.

However, it raises concerns about regulatory oversight and consistency, as the structured safeguards previously provided by lead managers are now absent.

17 In proviso of Sub-regulation (5) of Regulation 69 Provided that such agreements may include such other clauses as the issuer and the intermediaries may deem fit without diminishing or limiting in any way the liabilities and obligations of the lead manager(s), other intermediaries and the issuer under the Act, the Companies Act, 2013 95[***], the Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996 and the rules and regulations made thereunder or any statutory modification or statutory enactment thereof Provided that such agreements may include such other clauses as the issuer and the intermediaries may deem fit without diminishing or limiting in any way the liabilities and obligations of the intermediaries and the issuer under the Act, the Companies Act, 2013 95[***], the Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996 and the rules and regulations made thereunder or any statutory modification or statutory enactment thereof
18 In first proviso of Sub-regulation (7) of Regulation 69 Provided that if the issuer itself is a registrar, it shall not appoint itself as a registrar to the issue; Provided that if the issuer itself is a registrar, it shall not appoint itself as a registrar to the issue.

Second proviso shall be omitted

the symbol “;” shall be substituted with the symbol “:”

 

The amendment removes the restriction that previously prevented lead managers from also acting as registrars in the same issue, which could lead to potential conflicts of interest. While this change offers flexibility and cost-saving benefits, it reduces the separation of duties, making stronger regulatory oversight necessary to ensure fairness and transparency in rights issues.
19 In Second proviso of Sub-regulation (7) of Regulation 69 Provided further that a lead manager shall not act as a registrar to the issue in which it is also handling the post-issue responsibilities.
20 Sub-regulation (2) of Regulation 70 (2) Without prejudice to the generality of sub-regulation (1), the draft letter of offer and letter of offer shall contain disclosures as specified in 97[Part B or Part B-1] of Schedule VI, as applicable (2) Without prejudice to the generality of sub-regulation (1), the draft letter of offer and letter of offer shall contain disclosures as specified in 97[Part B] of Schedule VI

 i. in sub-regulation (2), the words, symbols and figures “Part B or Part B-1 of Schedule VI, as applicable” shall be substituted with the words and figure “Part B of Schedule VI”;

ii. sub-regulations (3) and (4) shall be omitted;

This amendment has two major impacts:

Streamlining disclosure requirements by referencing only Part B of Schedule VI instead of Part B or Part B-1.

Eliminating lead managers’ statutory responsibilities for due diligence and ensuring issuer compliance.

While these changes may simplify and expedite rights issues, they increase risks for investors as issuers now have unchecked control over disclosures.

21 Sub-regulation (3) and (4) of Regulation 70 (3) The lead manager(s) shall exercise due diligence and satisfy themselves about all aspects of the issue including the veracity and adequacy of disclosure in the draft letter of offer and the letter of offer.

(4) The lead manager(s) shall call upon the issuer, its promoters and its directors to fulfil their obligations as disclosed by them in the draft letter of offer and letter of offer and as required in terms of these Regulations.

22 Sub-regulation (5) of Regulation 70 (5) The lead manager(s) shall ensure that the information contained in the draft letter of offer and letter of offer and the particulars as per audited financial statements in the letter of offer are not more than six months old from the issue opening date (5) The issuer shall ensure that the information contained in the draft letter of offer and letter of offer and the particulars as per audited financial statements in the letter of offer are not more than six months old from the issue opening date This amendment removes lead managers from the verification process, making issuers solely responsible for ensuring that financial statements in the letter of offer are not older than six months. While this reduces regulatory burdens and may streamline the rights issue process, it also eliminates an important layer of due diligence, potentially exposing investors to higher risks if issuers fail to comply.
23 Sub-regulation (6) of Regulation 70 (6) An issuer shall make disclosures in the draft letter of offer, letter of offer and abridged letter of offer, if the issuer or any of its promoters or directors is a wilful defaulter or a fraudulent borrower. (6) An issuer shall make disclosures in the draft letter of offer and letter of offer, if the issuer or any of its promoters or directors is a wilful defaulter or a fraudulent borrower. These amendments remove key disclosures from the abridged letter of offer, making important information less accessible to retail investors.

Sub-regulation (6) Change:

Risk Disclosure Reduction → Investors using the abridged letter of offer will no longer see if an issuer or its promoters are wilful defaulters or fraudulent borrowers, reducing transparency and investor protection.

Sub-regulation (7) Change:

Process Understanding Reduction → Retail investors relying on the abridged letter of offer will no longer have direct access to instructions on crediting and renouncing rights entitlements, potentially leading to confusion and lower participation in rights issues.

While SEBI may have intended to simplify the ALO, these changes reduce critical investor awareness and transparency, potentially harming informed investment decisions.

24 Sub-regulation (7) of Regulation 70 (7) In the letter of offer and the abridged letter of offer, the issuer shall disclose the process of credit of rights entitlements in the demat account and renunciation thereof. (7) In the letter of offer, the issuer shall disclose the process of credit of rights entitlements in the demat account and renunciation thereof.
25 Regulation 71 (1) Prior to making a rights issue, the issuer shall, except in case of a fast track issue, file a draft letter of offer, with the Board, in accordance with Schedule IV, along with fees as specified in Schedule III, with the Board and with the stock exchange(s), through the lead manager(s).

Provided that the issuer shall, in case of fast track issue, file a letter of offer and pay fees as specified in Schedule III with the Board.

(2) The lead manager(s) shall submit the following to the Board along with the draft letter of offer:

a) a certificate, confirming that an agreement has been entered into between the issuer and the lead manager(s) and includes content specified in Schedule II;

b) a due diligence certificate as per Form A of Schedule V;

c) in case of an issue of convertible debt instruments, a due diligence certificate from the debenture trustee as per Form B of Schedule V;

d) A certificate confirming compliance of the conditions specified in Part F of Schedule VI, if applicable.

(3) The issuer shall also file the draft letter of offer with the stock exchange(s) and shall submit to such stock exchange(s), the Permanent Account Number, bank account number and passport number of its promoters where they are individuals, and Permanent Account Number, bank account number, company registration number or equivalent and the address of the Registrar of Companies with which the promoter is registered, where the promoter is a body corporate.

(4) The Board may specify changes or issue observations, if any, on the draft letter of offer within thirty days from the later of the following dates:

(a) the date of receipt of the draft letter of offer, as applicable, under sub-regulation (1); or

(b) the date of receipt of satisfactory reply from the lead manager(s), where the Board has sought any clarification or additional information from them; or

(c) the date of receipt of clarification or information from any regulator or agency, where the Board has sought any clarification or information from such regulator or agency; or

(d) the date of receipt of a copy of in-principle approval letter issued by the stock exchanges.

(5) If the Board specifies any changes or issues observations on the draft letter of offer the issuer and lead manager(s) shall carry out such changes in the draft letter of offer and shall submit to the Board an updated draft letter of offer complying with the observations issued by the Board and highlighting all changes made in the draft letter of offer before filing the letter of offer with the stock exchanges.

(6) If there are any changes in the draft letter of offer in relation to the matters specified in Schedule XVI, an updated letter of offer or a fresh draft letter of offer, as the case may be, shall be filed with the Board along with fees specified in Schedule III.

(7) The lead manager(s) shall submit the following documents to the Board after issuance of observations by the Board or after expiry of the period stipulated in sub-regulation (4) of regulation 71 if the Board has not issued observations:

(a) a statement certifying that all changes, suggestions and observations made by the Board have been incorporated in the letter of offer;

(b) a due diligence certificate as per Form C of Schedule V, at the time of submission of the letter of offer with stock exchange(s);

(c) a due diligence certificate as per Form D of Schedule V, in the event the issuer has made a disclosure of any material development by issuing a public notice.

(8) Copy of the letter of offer shall also be filed with the Board and the stock exchanges through the lead manager simultaneously with filing of the letter of offer with the designated stock exchange.

(9) The draft letter of offer and letter of offer shall also be furnished to the Board in a soft copy.

Regulation 71 shall be substituted as under:

(1) The issuer shall file the draft letter of offer with the stock exchange(s) and shall submit to such stock exchange(s) the following:

a. the Permanent Account Number, bank account number and passport number of its promoters where they are individuals, and Permanent Account Number, bank account number, company registration number or equivalent, and the address of the Registrar of Companies with which the promoter is registered, where the promoter is a body corporate,

b. in case of an issue of convertible debt instruments, a due diligence certificate from the debenture trustee as per Form B of Schedule V.

(2) The issuer shall file letter of offer with the stock exchanges/ the designated stock exchange.

(3) The issuer shall file a letter of offer with the Board for information and dissemination on Board’s website along with fees specified in Schedule III.

This amendment eliminates SEBI’s review and approval role for rights issues, shifting responsibility entirely to issuers and stock exchanges. While this reduces compliance timelines and increases efficiency, it also raises risks related to inadequate disclosures, weaker due diligence, and reduced investor protection.

The issuer Company itself need to introduce safeguards to ensure disclosure and due diligence requirement as well as to prevent misuse of this relaxed regulatory framework to the detriment of investors.

26 Sub-Regulation (1), (2) and (3) of Regulation 72 (1) The draft letter of offer filed with the Board shall be made public for comments, if any, for a period of at least twenty one days from the date of filing, by hosting it on the websites of the issuer, the Board, stock exchanges where specified securities are proposed to be listed and the lead manager(s) associated with the issue.

(2) The issuer shall, within two days of filing of the draft letter of offer with the Board, make a public announcement in one English national daily newspaper with wide circulation, one Hindi national daily newspaper with wide circulation and one regional language newspaper with wide circulation at the place where the registered office of the issuer is situated, disclosing to the public the fact of filing of the draft letter of offer with the Board and inviting the public to provide their comments to the Board, the issuer or to the lead manager(s) in respect of the disclosures made in the draft letter of offer.

(3) The lead manager(s) shall, after expiry of the period stipulated in sub-regulation (1), file with the Board, details of the comments received by them or the issuer from the public, on the draft offer document, during that period and the consequential changes, if any, that are required to be made in the draft offer document.

Sub-regulations (1), (2) and (3) shall be omitted This amendment removes public scrutiny and feedback from the rights issue process, reducing transparency and investor protection. While it accelerates issuance timelines, it also increases risks, as issuers no longer face public oversight on their disclosures. The Company may need to introduce proper safeguards to prevent misleading disclosures and ensure investor confidence is maintained.
27 Sub-Regulation (4) of Regulation 72 (4) The issuer and the lead manager(s) shall ensure that the letters of offer are hosted on the websites as required under these regulations and its contents are the same as the versions as filed with the Board and the stock exchanges, as applicable (4) The issuer shall ensure that the draft letter of offer and letter of offer are hosted on the websites as required under these regulations and its contents are the same as the versions as filed with the Board and the stock exchanges, as applicable

(5) Stock exchanges shall provide copies of the draft letter of offer to the public as and when requested and may charge a reasonable sum for providing a copy of the same.

(ii. in sub-regulation (4), the words and symbol “issuer and the lead manager(s) shall ensure that the letters of offer” shall be substituted with the words “issuer shall ensure that the draft letter of offer and letter of offer”;

iii. in sub-regulation (5), the words and symbol “lead manager(s) and the” shall be omitted.)

This amendment shifts responsibility away from lead managers and places it entirely on issuers and stock exchanges. While it streamlines access and reduces compliance for intermediaries, it also removes an extra layer of verification and investor assistance that lead managers previously provided. The Issuer Company may need to ensure that strict compliance in making offer documents accurate and easily accessible to investors as may be enforced the stock exchanges.
28 Sub-Regulation (5) of Regulation 72 (5) The lead manager(s) and the stock exchanges shall provide copies of the draft letter of offer to the public as and when requested and may charge a reasonable sum for providing a copy of the same.
29 Sub-regulation (1) of Regulation 73 (1) The issuer shall decide the issue price, in consultation with the lead manager(s), before determining the record date, which shall be determined in consultation with the designated stock exchange. (1) The issuer shall decide the issue price before determining the record date, which shall be determined in consultation with the designated stock exchange.

(In regulation 73, in sub-regulation (1), the words and symbols “,in consultation with the lead manager(s),” shall be omitted.)

This amendment removes the role of lead managers in pricing decisions, giving issuers full control over determining the issue price. While this increases flexibility and reduces compliance costs, it eliminates an important layer of professional expertise and market insight.
30 Sub-regulation (3) of Regulation 74 (3) Subject to other applicable provision of these regulations, the issuer may make reservation for its employees along with rights issue subject to the condition that the value of allotment to any employee shall not exceed two lakhs rupees.

Provided that in the event of under-subscription in the employee reservation portion, the unsubscribed portion may be allotted on a proportionate basis, for a value in excess of two lakhs rupees, subject to the total allotment to an employee not exceeding five lakhs rupees.

Sub-regulation (3) and the proviso to it shall be omitted By removing employee reservations in rights issues, SEBI has eliminated preferential allotments for employees, ensuring equal treatment for all shareholders.

While this simplifies the process for issuers, it reduces incentives for employee participation and removes a potential benefit that employees previously enjoyed. The amendment reflects SEBI’s broader effort to streamline regulations and create a more uniform rights issue framework.

31 Regulation 75 Abridged letter of offer Letter of offer This amendment removes the requirement for an abridged letter of offer, ensuring that investors only receive the full letter of offer with their application forms. While this enhances transparency and uniformity, it could make it harder for retail investors to quickly grasp key details, potentially discouraging participation.
32 Sub-regulation (1) of Regulation 75 (1) The abridged letter of offer shall contain the disclosures as specified by the Board in Part F of Schedule VI and shall not contain any matter extraneous to the contents of the letter of offer. (2) Every application form distributed by the issuer or any other person in relation to the issue shall be accompanied by a copy of the letter of offer.

In regulation 75,

i. in the marginal note, the words “Abridged letter” shall be substituted with the word “Letter”;

ii. sub-regulation (1) shall be omitted;

iii. in sub-regulation (2), the word “abridged” shall be omitted.

33 Sub-regulation (2) of Regulation 75 (2) Every application form distributed by the issuer or any other person in relation to the issue shall be accompanied by a copy of the abridged letter of offer.
34 Sub-regulation (1) of Regulation 77 (1) The lead manager(s) shall ensure availability of the letter of offer and other issue material including application forms with stock exchanges, registrar to issue, registrar and share transfer agents, depository participants, stock brokers, underwriters, bankers to the issue, investors‘ associations and self certified syndicate banks before the opening of the issue. (1) The issuer shall ensure availability of the letter of offer and other issue material including application forms with stock exchanges, registrar to issue, registrar and share transfer agents, depository participants, stock brokers, underwriters, bankers to the issue, investors‘ associations and self certified syndicate banks before the opening of the issue.

(2) The letter of offer, along with application form, shall be despatched through registered post or speed post or by courier service or by electronic transmission to all the existing shareholders at least three days before the date of opening of the issue.

(3) The letter of offer shall also be provided by the issuer to any existing shareholder who makes a request in this regard.

In regulation 77,

i. in sub-regulation (1), the words and symbol “lead manager(s)” shall be substituted with the word “issuer”;

ii. in sub-regulation (2), the word “abridged” shall be omitted;

iii. in sub-regulation (3), the words and symbol “or lead manager(s)” shall be omitted.

The amendment reflects SEBI’s ongoing shift towards reducing the role of lead managers in rights issues while placing greater responsibility on issuers.

Key Takeaways:

(1) Issuers now have full responsibility for making issue materials available before the issue opens.

(2) Full letter of offer must be sent instead of an abridged version, enhancing transparency.

(3) Lead managers are no longer required to provide issue documents to shareholders upon request.

(4) Retail investors may struggle with a full-length letter of offer instead of a simplified abridged version.

While these changes streamline regulatory processes, SEBI may need to monitor investor accessibility issues and ensure issuers comply with their expanded responsibilities.

35 Sub-regulation (2) of Regulation 77 (2) The abridged letter of offer, along with application form, shall be despatched through registered post or speed post or by courier service or by electronic transmission to all the existing shareholders at least three days before the date of opening of the issue.
36 Sub-regulation (3) of Regulation 77 (3) The letter of offer shall also be provided by the issuer or lead manager(s) to any existing shareholder who makes a request in this regard.
37 After regulation 77A and before regulation 78 77A. (1) The rights entitlements shall be credited to the demat account of the shareholders before the date of opening of the issue.

(2) Allotment of specified securities shall be made in the dematerialised form only.

“Allotment to Specific Investors

77B. (1) For the purpose of this chapter, specific investor would mean any investor who is eligible to participate in rights issue of the issuer and –

(a) whose name has been disclosed by the issuer in terms of sub-clause (i) of clause (f) of sub-regulation (1) of regulation 84 of these regulations;

(b) whose name has been disclosed by the issuer in terms of sub-clause (ii) of clause (f) of sub-regulation (1) of regulation 84 of these regulations.

(2) The application by the specific investor(s) in terms of clause (a) shall be made on the first day of issue opening before 11 A.M. and the issuer shall disclose to the stock exchange(s) whether such specific investor(s) have made the application or not, for dissemination on the first day of issue opening by 11:30 A.M.

(3) No withdrawal of the application(s) shall be permitted when the application by the specific investor(s) is received in terms of clause (a).

(4) The application in terms of clause (b) shall be made by the specific investor(s) along with the application money before the finalisation of basis of allotment.”

After regulation 77A and before regulation 78, the regulation 77B shall be inserted

SEBI has introduced a new category of specific investors, likely to bring greater transparency and predictability in allotment.

Issuers must disclose pre-identified investors, reducing uncertainty about participation which may have following implication:

(1) Certain specific investors must submit applications by 11 A.M. on the first day and their participation must be disclosed by 11:30 A.M.

(2) Ensures that key investors commit early, improving market confidence in the issue.

(3) Helps retail and institutional investors assess early participation levels before deciding.

(4) Specific investors cannot withdraw their applications once submitted which reduces last-minute volatility in rights issues and ensures that strategic investors remain committed to the issue, may result into discourage speculative participation, as investors must be certain before applying.

(5) Alignment with Regulation 84 (Disclosure Requirements) : Issuers must disclose names of specific investors in compliance with Regulation 84, which enhances transparency, as investors will know in advance who the major participants in the rights issue are.

(6) Ensuring Payment Before Finalization of Allotment: Specific investors under Clause (b) must pay before finalization of allotment which Reduces default risk, ensuring that the issuer receives funds before confirming allotments.

(7) Streamlines the allotment process, making it more predictable.

The insertion of Regulation 77B introduces a structured framework for specific investors in rights issues, bringing greater transparency, predictability, and commitment to the process. Overall, this amendment is a proactive step toward making rights issues more transparent and structured, benefiting both issuers and investors.

38 Sub-regulation (2) of Regulation 81 (2) In case of every underwritten issue, the lead manager(s) shall undertake minimum underwriting obligations as specified in the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992. Sub-regulation (2) shall be omitted This amendment removes the requirement for lead managers to undertake minimum underwriting obligations, giving issuers more flexibility but also increasing their responsibility to arrange underwriting independently.

It will provide Greater flexibility for issuers in structuring underwriting agreements with Potential cost savings if issuers find more competitive underwriting options.

Overall, this change reduces regulatory burden on lead managers but places a higher responsibility on issuers to ensure their rights issues are successfully subscribed.

39 Sub-regulation (1) of Regulation 82 (1) If the issue size exceeds one hundred crore rupees, the issuer shall make arrangements for the use of proceeds of the issue to be monitored by a credit rating agency registered with the Board: (1) Issuer shall make arrangements for the use of proceeds of the issue to be monitored by a credit rating agency registered with the Board: Every rights issue, regardless of size, must have its proceeds monitored by a SEBI-registered credit rating agency.

Small and mid-sized issuers are now subject to the same scrutiny as large issuers.

This amendment removes the ₹100 crore threshold, making fund utilization monitoring mandatory for all rights issues.

Stronger investor protection through third-party monitoring.

Prevention of fund misuse, enhancing market transparency.

Increased accountability for all issuers, regardless of size.

Higher compliance costs for small issuers, making rights issues less appealing.

Administrative burden on companies that previously did not need monitoring.

Overall, this change strengthens transparency and investor trust but increases regulatory costs for smaller issuers.

40 Clause (a) of sub-regulation (1) in Regulation 84

Clause (c) of sub-regulation (1) in Regulation 84

Clause (e) &(f)  of sub-regulation (1) in Regulation 84

Sub-regulation (2) in Regulation 84

a) the date of completion of despatch of abridged letter of offer and the application form;

a statement that if the shareholders entitled to receive the rights entitlements have neither received the original application forms nor are in a position to obtain the form; they may make an application through the form available on the website of Registrar, stock exchanges or lead managers or in writing on a plain paper to subscribe to the Rights Issue along with a format specifying therein the necessary particulars such as name, address, ratio of rights issue, issue price, number of equity shares held, ledger folio numbers, depository participant ID, client ID, number of equity shares entitled and applied for, additional shares if any, and the amount to be blocked with SCSB along with the application

e) a statement to the effect that if the shareholder makes an application using the application form as well as plain paper, both the applications shall be liable to be rejected at the option of the issuer.

(3) An announcement regarding closure of issue shall be made only after the lead manager(s) is satisfied that at least ninety per cent. of the offer through letter of offer has been subscribed and a certificate has been obtained to that effect from the registrar to the issue:

Provided that such an announcement shall not be made before the date on which the issue is to be closed except for issue closing advertisement made in the format prescribed in these regulations.

a) the date of completion of despatch of letter of offer and the application form;

a statement that if the shareholders entitled to receive the rights entitlements have neither received the original application forms nor are in a position to obtain the form; they may make an application through the form available on the website of Registrar, stock exchanges or in writing on a plain paper to subscribe to the Rights Issue along with a format specifying therein the necessary particulars such as name, address, ratio of rights issue, issue price, number of equity shares held, ledger folio numbers, depository participant ID, client ID, number of equity shares entitled and applied for, additional shares if any, and the amount to be blocked with SCSB along with the application

After clause (e), the following clause shall be inserted, namely:

“(f) details of the specific investor(s):

i. name of the specific investor(s) (i.e. renouncees), name of the promoter(s)/promoter group (i.e. renouncer) and number of rights entitlements renounced, where the promoter(s)/promoter group is renouncing their rights entitlements in terms of sub-regulation (3) of regulation 62 and clause (b) of sub-regulation (1) of regulation 86 of these Regulations;

ii. name of the specific investor(s), where the issuer intends to allot any under- subscribed portion of rights issue in terms of clause (d) of sub-regulation (2) of regulation 90 of these regulations.”

(3) An announcement regarding closure of issue shall be made only after the issuer is satisfied that at least ninety per cent. of the offer through letter of offer has been subscribed and a certificate has been obtained to that effect from the registrar to the issue:

Provided that such an announcement shall not be made before the date on which the issue is to be closed except for issue closing advertisement made in the format prescribed in these regulations.

in sub-regulation (3), the words and symbol “lead manager(s)” shall be substituted with the word “issuer”.

This amendment removes lead managers from key compliance roles and places full responsibility on issuers for issue closure certification and disclosure of specific investor allocations.

(1) Greater transparency in renunciations and under-subscription allocations.

(2) Faster decision-making as issuers handle compliance directly.

(3) Less oversight, as lead managers no longer verify subscription levels before closure.

(4) Limited investor access, as lead managers’ websites will no longer host application forms.

Overall, this change streamlines the rights issue process but increases issuer responsibility, making strict regulatory enforcement essential to prevent non-compliance.

41 Regulation 85 85. Subject to the compliance with the provisions of the Companies Act, 2013, a rights issue may be opened within twelve months from the date of issuance of the observations by the Board under regulation 71. Regulation 85 shall be substituted with the following regulation, namely,-

Opening of the issue

85. Subject to the compliance with the provisions of the Companies Act, 2013, a rights issue may be opened within such period as may be specified by the Board from time to time.

This amendment removes the fixed 12-month timeline and grants SEBI discretion to specify time limits for rights issues.

(1) Greater flexibility for issuers to time their offerings.

(2) SEBI can adapt rules dynamically based on market conditions.

(3) Prevents rushed issuances that may lead to poor investor participation.

(4) Uncertainty for issuers—they may not know exactly how long they have unless SEBI specifies a clear timeframe.

Overall, this modernizes the regulation by allowing a more adaptable approach to rights issue timing, benefiting both issuers and investors.

42 In regulation 86, in sub-regulation (1), in the proviso, in clause (b) (b) the promoters and the promoter group of the issuer undertake to subscribe fully to their portion of rights entitlement and do not renounce their rights except to the extent of renunciation within the promoter group (b) the promoters and the promoter group of the issuer undertake to subscribe fully to their portion of rights entitlement and do not renounce their rights except to the extent of renunciation within the promoter group or to the specific investor(s) as disclosed by the issuer in terms of these regulations This amendment expands the renunciation rights of promoters, allowing them to transfer their entitlements to external investors, provided these investors are pre-disclosed in regulatory filings.

(1) Greater flexibility for promoters in ownership restructuring.

(2) More opportunities for issuers to attract strategic investors.

(3) Increased transparency through mandatory disclosure of renouncees.

(4) Risk of undisclosed control changes if not properly monitored.

(5) Possibility of preferential allotments to select investors.

Overall, this change balances flexibility with transparency subject to ensure strict compliance and disclosure requirements to prevent misuse.

43 Regulation 87 87. The rights issue shall be kept open for subscription for a minimum period of seven days and for a maximum period of thirty days and no withdrawal of application shall be permitted after the issue closing date. 87. The rights issue shall be kept open for subscription for such period as may be specified by the Board from time to time and no withdrawal of application shall be permitted after the issue closing date. This amendment removes the fixed 7-30 days period for rights issues, allowing SEBI to set the duration dynamically.

(1) More flexible rights issue timelines, adjusted based on market conditions.

(2) SEBI gains regulatory control, reducing risks of manipulation.

(3) Issuers can benefit from extended or shortened windows as needed.

Overall, this change modernizes the regulation by making rights issue durations more adaptable, subject to ensure clarity and consistency in setting timelines.

44 Sub-regulation (2) of Regulation 90 c) Allotment to the renouncees, who having applied for the specified securities renounced in their favour and also applied for additional specified securities, provided there is an under-subscribed portion after making full allotment specified in (a) and (b) above. The allotment of such additional specified securities may be made on a proportionate basis. after clause (c), the following clause shall be inserted, namely:

“(d) Allotment to any specific investor(s) disclosed by the issuer in terms of these regulations before opening of the issue, provided that there is an under-subscribed portion after making full allotment as per clauses (a), (b) and (c).”

(1) Greater flexibility for issuers to allocate under-subscribed shares to pre-disclosed investors.

(2) More streamlined process by eliminating lead managers from allotment verification.

(3) Increased transparency by requiring issuers to disclose specific investors upfront.

(4) Reduced oversight in allotment fairness due to the removal of lead managers.

These changes enhance efficiency and flexibility but reduce independent oversight subject to ensure strict enforcement of disclosure norms to prevent any misuse in under-subscription allotments and allotment finalization processes.

45 Sub-regulation (3) of Regulation 90 The authorised employees of the designated stock exchange along with the lead manager(s) and registrars to the issue shall ensure that the basis of allotment is finalised in a fair and proper manner as may be prescribed by the Board The authorised employees of the designated stock exchange along with the registrars to the issue shall ensure that the basis of allotment is finalised in a fair and proper manner as may be prescribed by the Board

in sub-regulation (3), the words and symbol “lead manager(s) and” shall be omitted.

46 Sub-regulation (1) of Regulation 91 (1) The issuer and lead manager(s) shall ensure that the specified securities are allotted and/or application monies are refunded or unblocked within such period as may be specified by the Board. (1) The issuer shall ensure that the specified securities are allotted and/or application monies are refunded or unblocked within such period as may be specified by the Board.

i. in sub-regulation (1), the words and symbol “and lead manager(s)” shall be omitted;

(1) Issuers have greater control over post-issue processes.

(2) Lead managers face lower regulatory risks and costs.

(3) Streamlines compliance procedures, making the process more efficient.

(4) Higher risk of non-compliance by issuers, as no third party (lead managers) will oversee the process.

(5) Investors may have fewer safeguards in case issuers fail to meet post-issue obligations.

This amendment represents a fundamental shift in regulatory responsibility, moving post-issue compliance entirely to issuers. While this increases efficiency and flexibility, it removes an independent layer of oversight that previously ensured transparency.

47 Sub-regulation (2) of Regulation 91 (2) The lead manager(s) shall ensure that the allotment, credit of dematerialised securities, refunding or unblocking of application monies, as may be applicable, are done electronically (2) Issuer shall ensure that the allotment, credit of dematerialised securities, refunding or unblocking of application monies, as may be applicable, are done electronically

ii. in sub-regulation (2), the words and symbol “lead manager(s)” shall be substituted with the word “issuer”;

48 Sub-regulation (3) of Regulation 91 (3) Where the specified securities are not allotted and/or application monies are not refunded or unblocked within the period stipulated in sub-regulation (1) above, the issuer shall undertake to pay interest at the rate of fifteen per cent. per annum to the shareholders within such time as disclosed in the draft letter of offer and the letter of offer and the lead manager(s) shall ensure the same. (3) Where the specified securities are not allotted and/or application monies are not refunded or unblocked within the period stipulated in sub-regulation (1) above, the issuer shall undertake to pay interest at the rate of fifteen per cent. per annum to the shareholders within such time as disclosed in the draft letter of offer and the letter of offer.

iii. in sub-regulation (3), the words and symbol “and the lead manager(s) shall ensure the same” shall be omitted.

49 Sub-regulation (1) of Regulation 92 (1) The lead manager(s) shall ensure that an advertisement giving details relating to subscription, basis of allotment, number, value and percentage of all applications including ASBA, number, value and percentage of successful allottees for all applications including ASBA, date of completion of despatch of refund orders, as applicable, or instructions to self- certified syndicate banks by the Registrar, date of despatch of certificates or date of credit of specified securities, as applicable, and date of filing of listing application, etc. is released within ten days from the date of completion of the various activities in at least one English national daily newspaper with wide circulation, one Hindi national daily newspaper with wide circulation and one regional language daily newspaper with wide circulation at the place where registered office of the issuer is situated. (1) The issuer shall ensure that an advertisement giving details relating to subscription, basis of allotment, number, value and percentage of all applications including ASBA, number, value and percentage of successful allottees for all applications including ASBA, date of completion of despatch of refund orders, as applicable, or instructions to self- certified syndicate banks by the Registrar, date of despatch of certificates or date of credit of specified securities, as applicable, and date of filing of listing application, etc. is released within ten days from the date of completion of the various activities in at least one English national daily newspaper with wide circulation, one Hindi national daily newspaper with wide circulation and one regional language daily newspaper with wide circulation at the place where registered office of the issuer is situated.
50 marginal heading of Regulation 93 Post-issue responsibilities of the lead manager(s) Post-issue responsibilities This amendment marks a fundamental shift in post-issue oversight, transferring responsibility from lead managers to designated stock exchanges and issuers.

(1) Lead managers are relieved of post-issue compliance burdens, making their role more focused on structuring and execution.

(2) Stock exchanges now play a bigger regulatory role, ensuring better enforcement and more impartial oversight.

(3) Issuers retain full responsibility for post-issue processes, making them directly accountable for compliance.

(4) Investors may experience delays in grievance resolution if exchanges do not act promptly.

(5) Underwriting compliance must be strictly monitored to prevent defaults and funding gaps for issuers.

This is a strategic regulatory shift aimed at centralizing oversight with stock exchanges, reducing compliance burdens on lead managers, and making issuers directly accountable.

51 Sub-regulation (1) of Regulation 93 (1) The responsibility of the lead manager(s) shall continue until completion of the issue process and for any issue related matter thereafter. Sub-regulation (1) shall be omitted
52 Sub-regulation (2) of Regulation 93 (2) The lead manager(s) shall regularly monitor redressal of investor grievances arising from any issue related activities. (2) The designated stock exchange shall regularly monitor redressal of investor grievances arising from any issue related activities.
53 Sub-regulations (3) and (4) of regulation 93 (3) The issuer shall continue to be responsible for post-issue activities till the applicants have received , credit to their demat account or refund of application monies and listing or trading permission is obtained.

(4) The issuer shall be responsible for and co-ordinate with the registrars to the issue and with various intermediaries at regular intervals after the closure of the issue to monitor the flow of applications from self-certified syndicate banks, processing of the applications including application form for ASBA and other matters till the basis of allotment is finalised, credit of the specified securities to the dematerialised accounts of the allottees, as applicable and unblocking of ASBA accounts/ despatch of refund orders are completed and securities are listed, as applicable.

(3) The issuer shall continue to be responsible for post-issue activities till the applicants have received, credit to their demat account or refund of application monies and  listing or trading permission is obtained.

(4) The issuer shall be responsible for and co-ordinate with the registrars to the issue and with various intermediaries at regular intervals after the closure of the issue to monitor the flow of applications from self-certified syndicate banks, processing of the applications including application form for ASBA and other matters till the basis of allotment is finalised, credit of the specified securities to the dematerialised accounts of the allottees, as applicable and unblocking of ASBA accounts/ despatch of refund orders are completed and securities are listed, as applicable.

54 Sub-regulations (5), (6) and (7) of Regulation 93 (5) Any act of omission or commission on the part of any of the intermediaries noticed by the lead manager(s) shall be duly reported by them to the Board.

(6) In case there is a devolvement on underwriters, the lead manager(s) shall ensure that the notice for devolvement containing the obligation of the underwriters is issued within ten days from the date of closure of the issue.

(7) In case of undersubscribed issues that are underwritten, the lead manager(s) shall furnish information to the Board in respect of underwriters who have failed to meet their underwriting devolvement in the format specified in Schedule XVIII.

(5) Any act of omission or commission on the part of any of the intermediaries noticed by designated stock exchange shall be duly reported by them to the Board.

(6) In case there is a devolvement on underwriters, the designated stock exchange shall ensure that the notice for devolvement containing the obligation of the underwriters is issued within ten days from the date of closure of the issue.

(7) In case of undersubscribed issues that are underwritten, the designated stock exchange shall furnish information to the Board in respect of underwriters who have failed to meet their underwriting devolvement in the format specified in Schedule XVIII.

55 Sub-regulation (1) of Regulation 94 (1) The lead manager(s) shall confirm to the bankers to the issue by way of copies of listing and trading approvals that all formalities in connection with the issue have been completed and that the banker is free to release the money to the issuer or release the money for refund in case of failure of the issue. (1) The issuer shall confirm to the bankers to the issue by way of copies of listing and trading approvals that all formalities in connection with the issue have been completed and that the banker is free to release the money to the issuer or release the money for refund in case of failure of the issue. (1) Issuers now have direct control over compliance and fund release processes.

(2) Lead managers are relieved from post-issue obligations, reducing their compliance risks.

(3) Stock exchanges now ensure compliance with fund release, providing more regulatory oversight.

These changes streamline compliance by shifting responsibilities directly to issuers and stock exchanges.

56 Sub-regulation (3) of Regulation 94 (3) The lead manager(s) shall ensure that the monies received in respect of the rights issue are released to the issuer in compliance with the provisions of sub-section (3) of section 40 of the Companies Act, 2013, as applicable. (3) The designated stock exchange shall ensure that the monies received in respect of the rights issue are released to the issuer in compliance with the provisions of sub-section (3) of section 40 of the Companies Act, 2013, as applicable.
57 Regulation 95 The issuer shall ensure that all transactions in securities by the promoters and promoter group between the date of filing of the draft letter of offer or letter of offer, as the case may be, and the date of closure of the issue shall be reported to the stock exchanges where the specified securities of the issuer are to be listed, within twenty four hours of such transactions. Regulation 95 shall be substituted:

(1) The issuer shall ensure that all transactions in securities by the promoters and promoter group between the date of filing of draft letter of offer or letter of offer, as the case may be, and the date of closure of the issue shall be reported to the stock exchange(s), within twenty-four hours of such transactions.

(2) The issuer shall also ensure that any proposed pre-issue placement disclosed in the draft letter of offer shall be reported to the stock exchange(s), within twenty-four hours of such pre-issue transactions (in part or in entirety).

This amendment enhances transparency in the securities market by mandating timely disclosure of pre-issue placements.

By requiring issuers to report these placements within twenty-four hours, SEBI aims to provide investors with up-to-date information, thereby strengthening investor protection and promoting fair practices in the capital markets.

These changes reflect SEBI’s commitment to adapting regulatory frameworks to evolving market dynamics and ensuring that issuers adhere to stringent disclosure norms.

58 Regulation 96 The lead manager(s) shall submit post-issue reports as follows The issuer shall submit post-issue reports as follows This change aligns with SEBI’s broader initiative to enhance transparency and accountability in the securities issuance process.

By assigning the responsibility of submitting post-issue reports directly to the issuer, SEBI aims to ensure that the entity with the most comprehensive access to relevant information is accountable for timely and accurate reporting.

This shift is expected to improve the quality and reliability of post-issue disclosures, thereby strengthening investor protection and promoting fair practices in the capital markets.

These amendments reflect SEBI’s commitment to adapting regulatory frameworks to evolving market dynamics and ensuring that issuers adhere to stringent disclosure norms.

59 Regulation 97 An issuer shall not make any further issue of specified securities in any manner whether by way of public issue, rights issue, preferential issue, qualified institutions placement, issue of bonus shares or otherwise, except pursuant to an employee stock option scheme An issuer shall not make any further issue of specified securities in any manner whether by way of public issue, rights issue, preferential issue, qualified institutions placement, issue of bonus shares or otherwise, except pursuant to an employee stock option scheme or a stock appreciation right scheme These amendments aim to streamline the regulatory process and enhance flexibility for issuers:

By allowing issuances under stock appreciation right schemes, issuers have more options for employee compensation and incentives.

The removal of the specific clause for fast-7track issues and the consolidation of the regulation under a single clause simplify the regulatory framework, making it more straightforward for issuers to understand and comply with the requirements.

Shifting the filing requirement from SEBI to the stock exchanges may expedite the processing and approval of issues, potentially reducing the time to market for issuers.

These changes reflect SEBI’s efforts to adapt to evolving market practices and to promote ease of doing business while maintaining necessary regulatory oversight.

60 Clause (a) of Regulation 97 a) in case of a fast-track issue, during the period between the date of filing the letter of offer with the stock exchanges where the securities are proposed to be listed and the listing of the specified securities offered through the letter of offer or refund of application monies; or Clause (a) shall be omitted
61 Clause (b) of Regulation 97 b) in case of other issues, during the period between the date of filing the draft letter of offer with the Board and the listing of the specified securities offered through the letter of offer or refund of application monies b) during the period between the date of filing the draft letter of offer with the stock exchange(s) and the listing of the specified securities offered through the letter of offer or refund of application monies
62 Regulation 99 Unless otherwise specified, nothing contained in sub-regulations (1), (2), (4) and (5) of regulation 71 shall apply if the issuer satisfies the following conditions for making a rights issue through the fast track route –

a) the equity shares of the issuer have been listed on any stock exchange for a period of at least three years immediately preceding the reference date;

b) the entire shareholding of the promoter group of the issuer is held in dematerialised form on the reference date;

c) the average market capitalisation of public shareholding of the issuer is at least two hundred and fifty crore rupees 132[in at least one of the recognized stock exchanges with nationwide trading terminal, where its securities are listed;]

d) the annualised trading turnover of the equity shares of the issuer during six calendar months immediately preceding the month of the reference date has been at least two per cent. of the weighted average number of equity shares listed during such six months‘ period:

Provided that for issuers, whose public shareholding is less than fifteen per cent. of its issued equity capital, the annualised trading turnover of its equity shares has been at least two per cent. of the weighted average number of equity shares available as free float during such six months‘ period;

e) the annualized delivery-based trading turnover of the equity shares during six calendar months immediately preceding the month of the reference date has been at least ten per cent. of the annualized trading turnover of equity shares during such six months‘ period;

f) the issuer has been in compliance with the equity listing agreement or the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as applicable, for a period of at least three years immediately preceding the reference date:

Provided that if the issuer has not complied with the provisions of the listing agreement or the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as applicable, relating to composition of board of directors, for any quarter during the last three years immediately preceding the reference date, but is compliant with such provisions at the time of filing of letter of offer, and adequate disclosures are made in the letter of offer about such non-compliances during the three years immediately preceding the reference date, it shall be deemed as compliance with the condition;

Provided further that imposition of only monetary fines by stock exchanges on the issuer shall not be a ground for ineligibility for undertaking issuances under this regulation;

g) the issuer has redressed at least ninety five per cent. of the complaints received from the investors till the end of the quarter immediately preceding the month of the reference date;

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 letter of offer.;

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 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;

j) the equity shares of the issuer have not been suspended from trading as a disciplinary measure during last three years immediately preceding the reference date;

k) there shall be no conflict of interest between the lead manager(s) and the issuer or its group companies in accordance with the applicable regulations.

l) the promoters and promoter group shall mandatorily subscribe to their rights entitlement and shall not renounce their rights, except to the extent of renunciation within the promoter group or for the purpose of complying with minimum public shareholding norms prescribed under the Securities Contracts (Regulation) Rules, 1957; m) 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, for the qualifications wherein impact on the financials cannot be ascertained the same shall be disclosed appropriately in the letter of offer.

Regulation 99 shall be omitted The removal of Regulation 99 signifies that the specific eligibility criteria for fast-track rights issues have been eliminated. Consequently, all rights issues by listed issuers are now subject to the standard provisions of the SEBI (ICDR) Regulations, 2018, without the distinctions previously made for fast-track processes.

This amendment aims to create a more streamlined and uniform regulatory framework for rights issues, eliminating the bifurcation between standard and fast-track routes. By doing so, SEBI seeks to simplify the process for issuers while maintaining robust investor protection measures.

These changes reflect SEBI’s ongoing efforts to adapt to evolving market dynamics and to promote efficiency and transparency in capital-raising activities.

63 Clause (2) of Schedule III No provision In clause (2), in sub-clause (b) with respect to ‘Rights Issue’, the third column of the first table with the heading “Amount / Rate of fees for filing within one year after expiry of SEBI Observation letter” shall be omitted By eliminating this specific fee requirement, the amendment simplifies the fee structure associated with rights issues.

The removal of the fee for filings made within one year after the expiry of SEBI’s observation letter may encourage issuers to adhere more strictly to prescribed timelines, ensuring a more efficient and timely capital-raising process.

64 Schedule IV Draft offer documents/ letters of offer/ offer documents shall be filed by the lead manager(s) at the Head Office of the Board, situated at: SEBI Head Office, SEBI Bhavan, Plot No. C4-A, “G” Block, Bandra Kurla Complex, Bandra (East), Mumbai –400051. The existing clause shall be renamed as Clause (1), and the following new clause shall be inserted after the existing clause:

“(2) In case of Rights Issue, the issuer shall file the letter of offer with the Board at its Head Office in the address given at clause (1) above.”

The amendment delineates the filing responsibilities, specifying that while lead managers were responsible for filing draft offer documents and offer documents, issuers are now explicitly required to file letter of offer for Rights Issues directly with SEBI.

By directing issuers to file the respective Letter of offer at SEBI’s Head Office, the amendment ensures a uniform and streamlined filing process.

This change aims to enhance procedural clarity and efficiency in the filing of offer documents related to Rights Issues.

Analysis and Commentary on the Effective Date and Transition Provisions

The Securities and Exchange Board of India (SEBI) has introduced amendments to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, through the SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2025. The provisions specify the effective date and transition mechanism for the applicability of the new regulations, particularly for Rights Issues.

1. General Effective Date for Specific Provisions for Rights Issues: Provisions related to Rights Issues by listed issuers will become effective on the 31st day from the date of publication (here, date of notification: 3rd March, 2025). This provides a short transition period, allowing listed companies to adjust their processes accordingly before the new regulations take effect.

2. Applicability Based on Board Approval: If a Rights Issue is approved by the Board of Directors after the new regulations take effect, it must comply with the amended regulations. However, Rights Issues approved before the effective date will continue to be governed by the pre-amended provisions of the SEBI (ICDR) Regulations, 2018. This ensures that companies that have already planned their Rights Issues under the old framework do not face sudden regulatory disruptions.

3. Applicability to Draft Offer Documents: The amendments in specific regulations (LX, LXI, LXII, etc.) shall apply to draft offer documents filed after the effective date of these amendments. Any draft offer documents filed before the effective date will not be affected by the new provisions.

Overall, these amendments reflect SEBI’s balanced approach by ensuring that the transition to the new regulatory framework is clear, structured, and minimizes market disruption.

Weblink and source of information

1. https://www.sebi.gov.in/legal/regulations/mar-2025/securities-and-exchange-board-of-india-issue-of-capital-and-disclosure-requirements-amendment-regulations-2025_92539.html

2. https://www.sebi.gov.in

The Author can be contacted at email id roopalcs2001p@gmail.com.

Disclaimer: The contents of this article are for information purposes only and do not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up. The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

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