SEBI had vide its notification dated 3rd March 2025 issued SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2025 and circular dated 11th March 2025 (“new simplified regulations”) wherein it has considerably simplified the Rights issue process thereby making it time, process and cost efficient. The new simplified regulations would be applicable to Rights issues that are approved by Board of the Issuer after coming into force of these new simplified regulations. i.e. 8th April 2025.
As per consultation paper floated by SEBI prior to the notification of the new simplified regulations, SEBI intended to encourage Right Issues in the market vis a vis. other modes of funding, given the complexity and time involved in a rights issue, and thereby intended to amend the regulations to simply the process and reduce the time involved from ~ 300 days to ~ T+ 23 Working days, to encourage issuers to pursue Rights Issue.
key amendments made in Right Issue regime under new simplified regulations are detailed as under:
1. Entire Rights Issue process has been fast tracked. The rights issue shall be completed within 23 working days from the date of BM approving the Rights Issue. Timeline chart has been given by SEBI
2. Lead Manager appointment is not required. Responsibility of lead managers has been either omitted, or shifted to issuer company or designated stock exchange as the case may be.
3. Due diligence requirement of the lead managers has been done away with, however, the responsibility of the accuracy of the disclosures in the Offer Documents lies with the Company.
4. Fewer disclosures in Letter of Offer (“LOF”)
5. Financial Highlights of the latest Fiscal and the latest stub period (as already disclosed by the issuer to the stock exchanges) only to be provided in LOF
6. Statutory Auditors scope reduced significantly (As there are no lead managers required, quantum of the certificates have been substantially reduced)
7. Issue to be kept Open for min. 7 days and max. 30 days
Enclosing a comprehensive SOP, for executing Rights Issue (Public Issue) of Equity shares as per SEBI ICDR.
Rights Issue of Equity Shares- Detailed Schedule of Activities and Timelines
| Sr No. | Section Ref | Module | Particulars |
| 1 | Appointments | Company to finalize appointment of Intermediaries (Escrow Banks, Monitoring Agency, Printer, Ad Agency) | |
| 2 | Issue / Post Issue | Discussion on Marketing and Pricing to be initiated | |
| 3 | Agreements | Circulation of draft of Monitoring Agency Agreement | |
| 4 | Financials | Circulation of finalized financials (full set) | |
| 5 | Agreements | Circulation of draft of Escrow Agreement to Company and Escrow Bank | |
| 6 | Issue / Post Issue | Company to collate the following from Stock Exchange: 1. In-Principle application+Fee 2. Online software access + Fee 3. Listing and Trading application for REs and Equity Shares (and Fee details) |
|
| 7 | 2 May 2025 meeting | Prior intimation of BM to Ses – Reg 29(1) | |
| 8 | LOF | Circulation of revised draft of LOF | |
| 9 | Auditor / ICA | Circulation of circle ups for Joint Auditors/ICA | |
| 10 | Issue / Post Issue | Company to confirm on status of demat accounts | |
| 11 | Financials | File full set of financials for FY25 with the stock exchanges | |
| 12 | Standard Certificates | Finalization of filled in standard certificates/confirmation of emails obtained | |
| 13 | Auditor / ICA | Finalization of the draft of consent letter and comfort letter/ certificate required from Joint Auditors/ ICA | |
| 14 | Agreements | Receipt of comments on Registrar, Monitoring Agency agreement and Ad agency agreements | |
| 15 | Issue / Post Issue | Circulation of Stock Exchange LOF filing Set for comments | |
| 16 | Lender Consents | Confirmation of receipt of all lender consents/intimations sent | |
| 17 | Issue / Post Issue | Company to check on status of suspense account for REs to be credited in case of physical shareholders, frozen/suspended a/cs, IEPF, bounce cases, etc. | |
| 18 | Agreements | Receipt of comments from Escrow Bank on the Escrow Agreement | |
| 19 | LOF | Comments on revised draft of LOF (incl. auditor/ICA feedback) | |
| 20 | Issue / Post Issue | NSE/BSE filing set to be circulated to Company | |
| 21 | Agreements | Finalization of Escrow Agreement, Ad Agency, Registrar and Monitoring Agency Agreements and stamp papers to be kept ready for execution | |
| 22 | Eligibility | Discussion with Promoters on terms of the rights issue and obtain their letter of interest for participation in the rights issue | |
| 23 | |||
| 24 | LOF | Circulation of final draft of LOF along with final circle cups | |
| 25 | Issue / Post Issue | Make application to Depositories for ISIN creation (final letter of offer and In-principle approval to be shared later) | |
| 26 | Agreements | Execution of Registrar agreement, Escrow agreement, Monitoring Agency agreement, Ad Agency agreement | |
| 27 | LOF | Receipt of signed declaration pages | |
| 28 | Standard Certificates | Receipt of Executed Promoter/Promoter group commitment letters | |
| 29 | Approval / Resolutions | Board Meeting for approval of rights issue | |
| 30 | 2 May 2025 meeting | Outcome of BM to Ses – Reg 30 | |
| 31 | 8 May 2025 meeting | Prior Intimation – Notice to be sent to stock exchange for Board/Committee Meeting in which Issue Price, Record Date, Entitlement Ratio and other related decisions will be made (Subject to receipt of IP approval) | |
| 32 | Issue / Post Issue | Finalization of SEBI/NSE/BSE filing letters | |
| 33 | Standard Certificates | Receipt of Executed Standard Certificates (if any) or emails | |
| 34 | Auditor / ICA | Receipt of Executed comfort letter alongwith final circle-ups | |
| 35 | Reg 30 , Sch III, Part A, Para A (4)(D) | Approval / Resolutions | Intimation to stock exchanges of outcome of the meeting of committee and intimation of record date to depositories |
| 36 | Intimation to Listed Parent- of filing Outcome. Listed Parent to file SE Intimation | ||
| 37 | Reg 42 | Record date | Intimation of RD – to Ses – atleast 3 Clear WD |
| 38 | Payment of Sitting fees | ||
| 39 | Intimation to Committee members of RIC Constitution | ||
| 40 | preparation of Minutes | ||
| 41 | Reg 30 | Financila Statements | Filing detaiked Annual Aud SA and CFS and upload on website |
| 42 | Issue / Post Issue | Filing of letter of Offer and application for In-principle approval with Stock exchanges | |
| 43 | Issue / Post Issue | Circulation of draft of RE letter, application form | |
| 44 | Issue / Post Issue | Request to be sent to all physical shareholders based on latest benpos data to provide demat account details to Company/RTA | |
| 45 | Issue / Post Issue | Receipt of in-principle approval from stock exchanges and submission to depositories for ISIN | |
| 46 | Issue / Post Issue | Confirmation on creation of ISIN for Rights Entitlements (REs) | |
| 47 | Issue / Post Issue | Comments on RE Letter and Application Forms | |
| 48 | Approval / Resolutions | Board/ Committee meeting to approve LOF, Issue Price, Entitlement ratio, Record Date, Rights Issue schedule etc (ISIN to also be announced along with record date announcement) (Gap of 3 clear working days prior to Record Date) | |
| 49 | 8 May 2025 meeting | Outcome of BM to Ses – Reg 30 | |
| 50 | LOF | File Letter of Offer with SEBI and Stock Exchanges | |
| 51 | Reg 95 | Issue / Post Issue | All transactions in securities by Promoter & Promoter Group between the date of filing of the draft letter of offer and the date of closure of the issue shall be reported to the stock exchanges within twenty four hours of such transactions. |
| 52 | Issue / Post Issue | Finalization of application forms, RE Letter, RE Letter cover email | |
| 53 | Opening of Trading window | ||
| 54 | Circulation of BM Minutes | ||
| 55 | Issue / Post Issue | Ex Date | |
| 56 | Issue / Post Issue | Record Date | |
| 57 | Issue / Post Issue | Receipt of benpos as on record date (by end of day) | |
| 58 | Issue / Post Issue | Identification of demat accounts of shareholders which are frozen or blocked etc | |
| 59 | Issue / Post Issue | Determination of rights entitlement of every shareholder and separate communication to be sent to this effect to shareholders as a rights entitlement letter (to also be available on RTA ‘s website for each respective investor – each investor to have access only to his/her details) | |
| 60 | Issue / Post Issue | Initiate process of dispatch through emails of application forms to shareholders alongwith RE letter. Upload of LOFs on relevant websites | |
| 61 | Issue / Post Issue | Request to be sent to all physical shareholders as on record date to provide demat account details to Company/RTA for credit of REs | |
| 62 | Issue / Post Issue | Initiate process for credit of REs with depositories and provide confirmation to Stock Exchanges once corporate action for credit of REs is completed (morning) | |
| 63 | Issue / Post Issue | Receipt of credit confirmation from depositories for credit of REs to demat accounts of shareholders (Confirmation required for making application to stock exchanges for trading approval) | |
| 64 | Issue / Post Issue | Application to stock exchanges for obtaining trading approval of REs, access to online bid platform and intimation to Depositories to activate ISIN on issue opening date | |
| 65 | Issue / Post Issue | Registrar to send banking instructions to all SCSBs | |
| 66 | Issue / Post Issue | Complete dispatch of application forms and RE letters to shareholders and issue of dispatch confirmation letter (latest by 4pm) | |
| 67 | Issue / Post Issue | Strike for publication of dispatch advertisement | |
| 68 | 8 May 2025 meeting | Circulation of BM Minutes | |
| 69 | Issue / Post Issue | Publication of Advertisement under regulation 84(1) of SEBI ICDR Regulations for completion of dispatch (2 days before Issue opening) | |
| 70 | Issue / Post Issue | Receipt of confirmation from ad agency for publication of advertisement | |
| 71 | Issue / Post Issue | Last Date for receipt of trading approval from stock exchanges for REs | |
| 72 | Issue / Post Issue | Activation of ISIN for REs at mid night (issue opening date) by depositories | |
| 73 | Issue / Post Issue | Issue Opens | |
| 74 | 8 May 2025 meeting | Filing of Form MGT-14 | |
| 75 | Issue / Post Issue | Closure of Rights Entitlement trading (3 working days prior to Issue Closing Date) | |
| 76 | Issue / Post Issue | Last Date for receipt of demat account details from physical shareholders (2 working days prior to issue Closing Date) | |
| 77 | Issue / Post Issue | Last Date for credit of REs to physical shareholder account (1 working day prior to issue Closing Date) | |
| 78 | Issue / Post Issue | Intimation to depositories of issue closure date (at least one day before the issue closing date) | |
| 79 | Issue / Post Issue | Promoter to make application in the rights issue | |
| 80 | Issue / Post Issue | Issue Closes | |
| 81 | Issue / Post Issue | Suspension of RE ISIN for transfers (immediately on issue closure) | |
| 82 | Issue / Post Issue | RTA obtains bid file from Stock Exchanges (SEs) | |
| 83 | Issue / Post Issue | Reverting for correction files to SCSBs for ASBA bids | |
| 84 | Issue / Post Issue | Receipt of final certificates from all SCSBs for blocking of funds through ASBA | |
| 85 | Issue / Post Issue | Co-ordination with SCSBs for pending final certificates for ASBA application | |
| 86 | Issue / Post Issue | Complete reconciliation of valid ASBA, REs holding and technical rejection | |
| 87 | Issue / Post Issue | Finalization of basis of allotment along with designated stock exchange (in first half) | |
| 88 | Issue / Post Issue | Strike for publication of basis advertisement (Late evening) | |
| 89 | Issue / Post Issue | Instructions for transfer of funds to Escrow account and unblocking of funds | |
| 90 | Issue / Post Issue | Board/committee meeting for allotment of equity shares and necessary filings to be made with Stock Exchanges and RoC | |
| 91 | Issue / Post Issue | Listing application to be made to stock exchanges | |
| 92 | Issue / Post Issue | De-activation of rights entitlement ISIN | |
| 93 | Issue / Post Issue | Filing of Form PAS 3 | |
| 94 | Issue / Post Issue | Increase in capital – Reg 30(4) filing | |
| 95 | Issue / Post Issue | File SHP post issue – Reg 31 filing | |
| 96 | Issue / Post Issue | Form C – PIT Reg 7(2) | |
| 97 | Issue / Post Issue | SAST Filing – 2% change – M&M | |
| 98 | Issue / Post Issue | Update Paid up capital on NSE, BSE Portal | |
| 99 | Issue / Post Issue | Reg 76 filing – July Qtr – mention change in capital | |
| 100 | Issue / Post Issue | Payment of stamp duty on allotment | |
| 101 | Issue / Post Issue | Receipt of listing approval | |
| 102 | Issue / Post Issue | Application to depositories for credit of shares | |
| 103 | Issue / Post Issue | Credit confirmation from depositories | |
| 104 | Issue / Post Issue | Application for trading approval to stock exchanges and receipt of applicable approval | |
| 105 | Issue / Post Issue | Transfer of funds from Escrow account to Company’s account | |
| 106 | Issue / Post Issue | Publication of basis of allotment advertisement | |
| 107 | Issue / Post Issue | Commencement of Trading of Equity Shares | |
| 108 | Issue / Post Issue | Filing of Initial Post Issue Report with SEBI | |
| 109 | Issue / Post Issue | Filing of Media Compliance Report with SEBI | |
| 110 | Issue / Post Issue | Filings under SAST and PIT regulations | |
| 111 | Allotment | Filing of FCGPR for allotment to Non residents ( Not required, if not FDI) | |
| 112 | Board Meeting | Circulation of BM Minutes | |
| 113 | Issue / Post Issue | Filing of Final Post Issue Report with SEBI (15 days from basis of allotment) | |
| 114 | Reg 85 | Issue / Post Issue | Board to provide comments on report of Monitoring agency |
| 115 | Reg 85 | Issue / Post Issue | Publicly disseminate the report of the monitoring agency by uploading the same on website as well as stock exchange |
Notes:
1. In accordance with SEBI circular dated January 22, 2020, allotments to be done in demat form only.
2. Dispatch and post issue timelines to be discussed in more detail with the relevant intermediaries.
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