SEBI has introduced a revised framework for rights issues, aimed at faster completion and increased flexibility. Effective April 7, 2025, rights issues must be completed within 23 working days from board approval. The new regulations, outlined in the SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2025, also specify that rights issues must remain open for subscription for a minimum of seven and a maximum of thirty days. Stock exchanges and depositories are tasked with developing an automated system for bid validation within six months. The circular also introduces amendments to existing master circulars, clarifying procedures for letter of offer disclosures, application forms, bid data correction, and fee payments. For convertible debt instruments requiring shareholder approval, timelines will be adjusted accordingly. These changes are designed to streamline the rights issue process, enhance efficiency, and protect investor interests.
Securities and Exchange Board of India
Circular No. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2025/31 Dated: March 11, 2025
To,
Listed Entities
Recognized Stock Exchanges
Recognized Depositories
Registered Registrars to an Issue and Share Transfer Agents
Registered Bankers to an Issue
Self-Certified Syndicate Banks (SCSBs)
National Payments Corporation of India (NPCI)
Sir / Madam,
Sub: Faster Rights Issue with a flexibility of allotment to specific investor(s)
1. The new framework for Rights Issue process has been introduced vide notification of SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2025, with Gazette ID CG-DL-E-08032025-261516 published in the Official Gazette on March 08, 2025. The same is available at this
2. As part of the new framework, in terms of amended Regulation 85 of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (SEBI ICDR Regulations), it is being specified that Rights Issues shall be completed within 23 working days from the date of Board of Directors of the Issuer approving the Rights Issue.
3. Accordingly, the revised timelines for completion of the various activities involved in Rights Issue process from the date of Board of Directors of the Issuer approving the Rights Issue till the date of closure of Rights Issue are placed at Annexure I.
4. If the Issuer is making a Rights Issue of convertible debt instruments, wherein shareholders’ approval is required, then the timelines for Rights Issue would be adjusted accordingly owing to shareholders’ approval as mentioned in Annexure I.
5. In terms of Regulation 87 of SEBI ICDR Regulations and in view of the revised timelines, it is being specified that Rights Issue shall be kept open for subscription for a minimum period of seven days and for a maximum period of thirty days.
System for Validation of Bids
6. Validation of application bids received for subscribing to the shares in Rights Issue and finalization of basis of allotment shall also be carried out by the Stock Exchanges and Depositories along with the Registrar to the issue.
7. A system for automated validation of applications by the investors shall be developed by the Stock Exchanges and Depositories within a period of six months from the date of applicability of this Circular.
Consequential changes in Master Circular No. SEBI/HO/CFD/PoD2/P/CI/2024/0155
8. In view of the new framework of Rights Issue, the following partial modification in the Master Circular No. SEBI/HO/CFD/PoD-1/P/CIR/2024/0154 on SEBI ICDR Regulations, dated November 11, 2024 shall be carried out:
8.1. Para 1.3.1 of Chapter 2 of Master Circular No. SEBI/HO/CFD/PoD-1/P/CIR/2024/0154 shall read as under –
“In the letter of offer the issuer shall disclose the process of credit of REs in the demat account and renunciation thereof.”
8.2. Sub para (d) of para (A) of Annexure I of Chapter 2 of Master Circular No. SEBI/HO/CFD/PoD-1/P/CIR/2024/0154 shall read as under-
“Applicants can use application form available on the website of registrar to the issue or printed forms sourced from the issuer or registrars to the issue.”
8.3. Sub para (a) of para (E) of Annexure I of Chapter 2 of Master Circular No. SEBI/HO/CFD/PoD-1/P/CIR/2024/0154 shall read as under-
“Correction of bid data as collated by the SCSB after issue closing shall be completed on the issue closure date itself.”
8.4. Sub para 1.5 shall be inserted under Para 1 of Chapter 4 of Master Circular No. SEBI/HO/CFD/PoD-1/P/CIR/2024/0154. The text of the same shall read as under-
“For rights issues the issuer shall file the letter of offer with SEBI through email at cfddil@sebi.gov.in and the payment of filing fees shall be made online through payment link provided on SEBI website under the fees category “Filing Fees”.
8.5. Para 1 of Annexure IIIA of Chapter 4 of Master Circular No. SEBI/HO/CFD/PoD-1/P/CIR/2024/0154 shall read as under-
“The draft offer document filed with the Board for public issue (hereinafter “draft offer document”) of securities shall be scrutinized based on the broad guidelines specified as under and accordingly, the draft offer document shall be returned to the issuer and the Lead Manager(s) for resubmission in accordance with the following guidelines- “
8.6. Column under the head “Source of Information” of Table IV of Annexure VI of Chapter 8 of Master Circular No. SEBI/HO/CFD/PoD-1/P/CIR/2024/0154 shall read as under-
“Issuer”
8.7. Column under the head “Timelines for submission” of Table IV of Annexure VI of Chapter 8 of Master Circular No. SEBI/HO/CFD/PoD-1/P/CIR/2024/0154 shall read as under-
“Data from 1 to 14 shall be submitted by the issuer before grant of in principle approval by the Exchange(s)”
8.8. Para 5.6 of Chapter 9 of Master Circular No. SEBI/HO/CFD/PoD-1/P/CIR/2024/0154 shall read as under-
“ASBA facility in rights issue enables an investor / shareholder to apply through ASBA mode. ASBA process from the time of submission of application by the applicants till transfer of shares in the depository account of the investors, as specified for public issues, shall be followed in the case of rights issues also to the extent relevant for rights issue. The role and responsibilities of SCSBs, Stock Exchanges and RTAs for public issues, shall be applicable mutatis mutandis to rights issue also.”
9. The Recognized Stock Exchanges and Depositories are directed to
a. bring the contents of this circular to the notice of all the stakeholders;
b. put in place necessary systems and infrastructure for monitoring and implementation of this circular;
c. make consequential changes, if any, to their respective bye-laws, rules and regulations and bidding portal;
10. The provisions of this circular shall come into force from April 07, 2025 and shall be applicable to the Rights Issues that are approved by the Board of Directors of the Issuer from the date of coming into force of this circular.
11. This Circular is being issued in exercise of the powers conferred under Section 11 and Section 11A of the Securities and Exchange Board of India Act, 1992 read with Regulation 299 of SEBI ICDR Regulations, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
12. A copy of this circular is available on SEBI website at www.sebi.gov.in under the categories “Legal → Circulars”.
Yours faithfully,
Vimal Bhatter
Deputy General Manager
Corporation Finance Department
Tel. No.: +91 22 2644 9386
Email id: vimalb@sebi.gov.in
