SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 21st November, 2022
SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) (FOURTH AMENDMENT) REGULATIONS, 2022
No. SEBI/LAD-NRO/GN/2022/107.—In exercise of the powers conferred under section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, namely:—
1. These regulations may be called the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2022.
2. They shall come into force on the date of their publication in the Official Gazette:
Provided that the amendments to paragraph (9) of Part A of Schedule VI shall be applicable for all issues where Red Herring Prospectus is filed with the Registrars of Companies on or after the date of publication of this notification in the Official Gazette.
3. In the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, –
I. in regulation 25, in sub-regulation (1) the words “with the concerned regional office of the Board under the jurisdiction of which the registered office of the issuer company is located” shall be substituted with the words “with the Board”.
II. after Chapter II and before Chapter III, the following Chapter IIA shall be inserted, namely, –
“Chapter IIA
INITIAL PUBLIC OFFER ON MAIN BOARD THROUGH PRE-FILING OF DRAFT OFFER DOCUMENT
Definitions
59A. In this Chapter, unless the context otherwise requires,—
(a) “pre-filed draft offer document” shall mean draft offer document filed with the Board under this Chapter;
(b) “pre-filed offer document” shall mean pre-filed draft offer document or updated draft red herring prospectus-I or updated draft red herring prospectus-II with the Board under this Chapter;
(c) “updated draft red herring prospectus-I” shall mean the updated pre-filed draft offer document filed with the Board after complying with the observations issued by the Board on such pre-filed draft offer document;
(d) “updated draft red herring prospectus-II” shall mean the updated draft red herring prospectus-I filed with the Board after incorporating the comments of the public received on such updated draft red herring prospectus-I.
Application of this Chapter
59B. (1) In lieu of an initial public offer of specified securities on the Main Board under Chapter-II of these regulations, the issuer may make an initial public offer of specified securities in accordance with the provisions of this Chapter.
(2) Except for anything contrary provided in this Chapter, the provisions of Chapter-II shall mutatis mutandis apply in relation to the initial public offer made under the provisions of this Chapter:
Provided that regulation 8 and regulation 15 of these regulations shall apply at the stage of filing of the updated draft red herring prospectus-I.
Pre-filing of draft offer document with the Board and Stock Exchanges
59C. (1) Prior to making an initial public offer, the issuer may file three copies of the draft offer document with the Board, in accordance with Schedule IV, along with fees as specified in Schedule III, through the lead manager(s).
(2) The issuer shall also file the pre-filed draft offer document with the stock exchange(s) where the specified securities are proposed to be listed and submit to the stock exchange(s); the Permanent Account Number, bank account number and passport number of its promoters where they are individuals and the 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.
(3) The pre-filed draft offer document filed under sub-regulation (1) shall not be available in the public domain.
(4) The lead manager(s) shall submit the following to the Board along with the pre-filed draft offer document:
(a) a certificate, confirming that an agreement has been entered into between the issuer and the lead manager(s);
(b) a due diligence certificate as per Form AA 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) an undertaking from the issuer and the lead manager that they shall not conduct marketing or advertisement for the intended issue, in the format as may be specified by the Board from time to time:
Provided that all public communications issued or published in any media during the period commencing from the date of the meeting of the board of directors of the issuer in which the public issue is approved till the date of filing of updated draft red herring prospectus-I or withdrawal of pre-filed draft offer document shall be consistent with its past practices.
(5) The issuer shall, within two days of pre-filing the draft offer document, 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 the fact of filing of pre-filing of the draft offer document without providing any other details in relation to the intended issue:
Provided that the issuer shall state in the public announcement that the pre-filing of offer document shall not necessarily mean that the issuer shall undertake the initial public offering.
(6) The Board may recommend changes or issue observations, if any, on the pre-filed draft offer document within thirty days from the later of the following dates:
(a) the date of receipt of the pre-filed draft offer document 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 exchange(s);or
(e) date of intimation of completion of interaction with the qualified institutional buyers in terms of regulation 59D of these regulations; or
(f) date of intimation to the Board about the conversion of outstanding convertible securities or exercise of any other right which would entitle any person with any option to receive equity shares in terms of regulation 59E of these regulations.
(7) If the Board recommends any changes or issues observations on the pre-filed draft offer document, the issuer and the lead manager(s) shall carry out such changes in the pre-filed draft offer document and shall submit to the Board an updated draft red herring prospectus-I complying with the observations issued by the Board:
Provided that there shall be a minimum gap of seven working days between the date of intimation to the Board about the completion of interaction with the qualified institutional buyers in accordance with regulation 59D of these regulations and the date of filing of the updated draft red herring prospectus-I.
Explanation: For the purpose of this regulation, an updated draft red herring prospectus-I shall be complete in all respects and shall be in compliance with the provisions of these regulations and to the other applicable laws as the case may be.
(8) The lead manager(s) shall submit the following documents to the Board after issuance of observations by the Board:
(a) a statement certifying that all changes, suggestions and observations made by the Board have been incorporated in the offer document;
(b) a due diligence certificate as per Form CA of Schedule V, at the time of filing of the offer document;
(9) The updated draft red herring prospectus-I 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 web sites of the Board, the stock exchanges where the specified securities are proposed to be listed and that of the lead manager(s) associated with the issue:
Provided that pursuant to the filing of the updated draft red herring prospectus-I, all public communication, publicity material, advertisements and research reports shall comply with the provisions of Schedule IX.
(10) The issuer shall, within two days of filing the updated draft red herring prospectus-I, 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 the fact of filing of the updated draft red herring prospectus-I and inviting the public to provide their comments to the Board, the issuer or the lead manager(s) in respect of the disclosures made in the updated draft red herring prospectus-I.
(11) The lead manager(s) shall, after expiry of the period stipulated in sub-regulation (9), file with the Board, the details of the comments received by them or the issuer from the public, on the updated draft red herring prospectus-I, during that period and the consequential changes, if any, that are required to be made in the updated draft red herring prospectus-I.
(12) The issuer and the lead manager(s) shall carry out such changes in the updated draft red herring prospectus-I and shall submit to the Board an updated draft red herring prospectus-II before filing the
offer document with the Registrar of Companies or an appropriate authority, as applicable.
(13) The lead manager(s) shall submit the following documents to the Board before filing the offer document with the Registrar of Companies:
(a) a statement certifying that all changes, suggestions and observations made by the Board have been incorporated in the offer document;
(b) a due diligence certificate as per Form CA of Schedule V, at the time of filing of the offer document;
(c) a copy of the resolution passed by the board of directors of the issuer for allotting specified securities to promoter(s) towards amount received against promoters‘ contribution, before opening of the issue;
(d) a certificate from a statutory auditor, before opening of the issue, certifying that promoters‘ contribution has been received in accordance with these regulations, accompanying therewith the names and addresses of the promoters who have contributed to the promoters‘ contribution and the amount paid and credited to the issuer‘s bank account by each of them towards such contribution;
(e) a due diligence certificate as per Form DA of Schedule V, in the event the issuer has made a disclosure of any material development by issuing a public notice pursuant to para 4 of Schedule IX.
(14) The copy of the offer document shall also be filed promptly with the Board and the stock exchange(s) through the lead manager(s) after filing the offer documents with the Registrar of Companies.
(15) The pre-filed draft offer document and the offer document shall also be furnished to the Board in a soft copy.
(16) The issuer and the lead manager(s) shall ensure that the offer documents are hosted on the websites as required under these regulations and that its contents are the same as the versions filed with the Registrar of Companies, the Board and the stock exchanges, as may be applicable.
(17) The lead manager(s) and the stock exchanges shall provide the copies of the offer document to the public as and when requested and may charge a reasonable sum for providing the same.
Interaction with qualified institutional buyers
59D. (1) Notwithstanding anything to the contrary contained in the provisions of this Chapter, an issuer may interact with the qualified institutional buyers for limited marketing of the intended issue from the time of pre-filing the draft offer document till the Board issues any observations on such pre-filed draft offer document.
(2) The interaction specified under sub-regulation (1) shall be restricted to the information contained in the pre-filed draft offer document.
(3) In case the issuer interacts with the qualified institutional buyers in terms of sub-regulation (1) and sub-regulation (2) above, the issuer and lead manager(s) shall prepare a list of the qualified institutional buyers who have participated in such interaction(s).
(4) The issuer and the lead manager(s) shall submit to the Board confirmation of closure of interaction(s) with the qualified institutional buyers.
General Conditions
59E. (1) Notwithstanding anything contained in any other provisions of these regulations, subject to intimation to the Board and the stock exchanges, an issuer opting for initial public offer through pre-filing the draft offer document in terms of the provisions of this Chapter shall, till the Board recommends any changes or issues observations on the pre-filed draft offer document, be permitted the following:
(a) Existence of outstanding convertible securities or any other right which would entitle any person with any option to receive equity shares of the issuer:
Provided that the issuer shall mandatorily convert such outstanding convertible securities or exercise any other right which would entitle any person with any option to receive equity shares of the issuer and intimate such act of conversion to the Board before the Board recommends any changes or issues observations on the pre-filed draft offer document:
Provided further that the following shall be permitted even after the issuance of observations by the Board on the pre-filed draft offer document:
(i) Existence of outstanding options granted to employees, whether currently an employee or not, pursuant to an employee stock option scheme in compliance with the Companies Act, 2013, the relevant Guidance Note or accounting standards, if any, issued by the Institute of Chartered Accountants of India or pursuant to the Companies Act, 2013, in this regard;
(ii) Existence of fully paid-up outstanding convertible securities which are required to be converted on or before the date of 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;
(b) Issue of specified securities;
(c) Issue such convertible securities that are mandatorily and compulsorily convertible into equity shares at the time of filing of offer document, provided the details for such securities are given in the updated draft red herring prospectus-I in relation to the maximum number of shares in which such convertible securities shall be converted.
(2) If there are any changes in the pre-filed draft offer document after the Board recommends any changes or issues observations on such pre-filed draft offer document in relation to the matters specified in Schedule XVI-A, an updated pre-filed draft offer document or a fresh pre-filed draft offer document, as the case may be, shall be filed with the Board along with fees specified in Schedule III.
Explanation: For the purpose of this regulation, changes made in the pre-filed draft offer document in relation to the matters specified in clause (1) of Schedule XVIA before the Board recommends any changes or issues observations on the pre-filed draft offer document shall not require fresh filing of such pre-filed draft offer document.
(3) If there are any changes in the updated draft red herring prospectus-I in relation to the matters specified in Schedule XVI, an updated pre-filed offer document or a fresh draft offer document under Chapter II or fresh pre-filed draft offer document, as the case may be, shall be filed with the Board along with fees specified in Schedule III.
(4) Subject to the compliance with the provisions of the Companies Act, 2013, a public issue may be opened within eighteen months from the date of issuance of the observations by the Board under regulation 59C of these regulations:
Provided that the issuer shall file updated draft red herring prospectus-I with the Board and the stock exchanges in terms of regulation 59C of these regulations within sixteen months from the date of issuance of the observations by the Board.”
III. in regulation 71, in sub-regulation (1) the words “with the concerned regional office of the Board under the jurisdiction of which the registered office of the issuer company is located” shall be substituted with the words “with the Board”.
IV. in regulation 123, in sub-regulation (1) the words “with the concerned regional office of the Board under the jurisdiction of which the registered office of the issuer company is located” shall be substituted with the words “with the Board”.
V. after regulation 162, the following regulation (162A) shall be inserted, namely, –
“Monitoring agency
162A. (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:
Provided that nothing contained in this clause shall apply to an issue of specified securities made by a bank or public financial institution or an insurance company.
(2) The monitoring agency shall submit its report to the issuer in the format specified in Schedule XI on a quarterly basis, till hundred percent of the proceeds of the issue have been utilised.
(3) The board of directors and the management of the issuer shall provide their comments on the findings of the monitoring agency as specified in Schedule XI.
(4) The issuer shall, within forty five days from the end of each quarter, upload the report of the monitoring agency on its website and also submit the same to the stock exchange(s) on which its equity shares are listed.”
VI. in regulation 164A, in sub-regulation (6),
(a) in clause (a), the words and symbols “public financial institution or by a scheduled commercial bank, which is not a related party to the issuer” shall be substituted with the words “credit rating agency registered with the Board”;
(b) in clause (a), in sub-clause (i), the words “until at least ninety five percent” shall be substituted with the words ―till hundred percent.”
VII. after regulation 173, the following regulation (173A) shall be inserted, namely, –
“Monitoring agency
173A. (1) If the issue size, excluding the size of offer for sale by selling shareholders, 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:
Provided that nothing contained in this clause shall apply to an issue of specified securities made by a bank or public financial institution or an insurance company.
(2) The monitoring agency shall submit its report to the issuer in the format specified in Schedule XI on a quarterly basis, till hundred percent of the proceeds of the issue have been utilised.
(3) The board of directors and the management of the issuer shall provide their comments on the findings of the monitoring agency as specified in Schedule XI.
(4) The issuer shall, within forty five days from the end of each quarter, upload the report of the monitoring agency on its website and also submit the same to the stock exchange(s) on which its equity shares are listed.”
VIII. in Schedule III, in the title, after numbers and symbols “25 (6)”, the numbers and symbols “59C (1), 59E (2), 59E (3)” shall be inserted.
IX. in Schedule IV,
(i) in the title, after numbers and symbols “25 (1)”, the numbers and symbols “59C (1)” shall be inserted.
(ii) the words and symbol “with the relevant office of the Board under the jurisdiction of which the registered office of the issuer company is located, based on the estimated issue size as may be specified by the Board from time to time.” shall be substituted with the words, numbers and symbols “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.”
X. in Schedule V,
(i) in the title, after numbers and symbols ―25 (2) (b)”, the numbers and symbols ―59C (4), 59C (13)” shall be inserted.
(ii) after Form-A, the following form (Form AA) shall be inserted, namely-
“Form AA – Format of due diligence certificate to be given by the lead manager(s) along with the pre-filed draft offer document
[See regulation 59A]
To,
Securities and Exchange Board of India
Dear Sirs,
Sub.: Public Issue of………………………… by…………………………………… (Name of the issuer)
We confirm that:
(1) We have examined various documents including those relating to litigation, commercial disputes, patent disputes, disputes with collaborators, etc. and other material while finalising the pre-filed draft offer document of the subject issue;
(2) On the basis of such examination and discussions with the issuer, its directors and other officers, other agencies, and independent verification of the statements concerning the objects of the issue, price justification, contents of the documents and other papers furnished by the issuer, we confirm that:
(a) the pre-filed draft offer document is in conformity with the documents, materials and papers which are material to the issue;
(b) all material legal requirements relating to the issue as specified by the Board, the Central Government and any other competent authority in this behalf have been duly complied with; and
(c) the material disclosures made in the pre-filed draft offer document are true and adequate to enable the investors to make a well informed decision as to the investment in the proposed issue and such disclosures are in accordance with the requirements of the Companies Act, 2013, these regulations and other applicable legal requirements.
(3) Besides us, all intermediaries named in the pre-filed draft offer document are registered with the Board and till date; such registration is valid.
(4) We have satisfied ourselves about the capability of the underwriters to fulfil their underwriting commitments.
(5) Written consent from the promoters has been obtained for inclusion of their specified securities as part of the promoters‘ contribution subject to lock-in and the specified securities proposed to form part of the promoters‘ contribution that are subject to lock-in shall not be disposed or sold or transferred by the promoters during the period starting from the date of pre-filing the draft offer document with the Board till the date of commencement of lock-in period as stated in the draft offer document.
(6) All applicable provisions of these regulations, which relate to specified securities ineligible for computation of promoters‘ contribution, have been and/or shall be duly complied with and appropriate disclosures as to compliance with the said regulation(s) have been made in the pre-filed draft offer document.
(7) All applicable provisions of these regulations which relate to receipt of promoters“ contribution prior to opening of the issue, shall be complied with. Arrangements have been made to ensure that the promoters‘ contribution shall be received at least one day before the opening of the issue and that the auditors‘ certificate to this effect shall be duly submitted to the Board. We further confirm that arrangements have been made to ensure that the promoters‘ contribution shall be kept in an escrow account with a scheduled commercial bank and shall be released to the issuer along with the proceeds of the issue.
(8) Necessary arrangements shall be made to ensure that the monies received pursuant to the issue are credited or transferred to in a separate bank account as per the provisions of sub-section (3) of section 40 of the Companies Act, 2013 and that such monies shall be released by the said bank only after permission is obtained from all the stock exchanges, and that the agreement entered into between the bankers to the issue and the issuer specifically contains this condition.
(9) The existing business as well as any new business of the issuer for which the funds are being raised fall within the ‘main objects‘ in the Object Clause of the Memorandum of Association or other Charter of the issuer and that the activities which have been carried in the last ten years are valid in terms of the object clause of the Memorandum of Association.
(10) Following disclosures have been made in the pre-filed draft offer document:
(a) An undertaking from the issuer that at any given time, there shall be only one denomination for the equity shares of the issuer, excluding SR equity shares, where an issuer has outstanding SR equity shares, and
(b) An undertaking from the issuer that it shall comply with all disclosures and accounting norms specified by the Board.
(11) We shall comply with the regulations pertaining to advertisements in terms of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.
We enclose a note explaining the process of due diligence that has been exercised by us including in relation to the business of the issuer, the risks in relation to the business, experience of the promoters and that the related party transactions entered into for the period disclosed in the offer document have been entered into by the issuer in accordance with applicable laws.
We enclose a checklist confirming regulation-wise compliance with the applicable provisions of these regulations, containing details such as the regulation number, its text, the status of compliance, page number of the pre-filed draft offer document where the regulation has been complied with and our comments, if any.
We also enclose plan of action for compliance with Regulation 8 and Regulation 15.
Place:
Date:
Lead Manager(s) to the Issue
with Official Seal(s)”
(iii) in Form C-
(a) Before the title, after word, numbers and symbols “regulation 25 (9) (b)”, the numbers and symbols “59C (13)” shall be inserted.
(b) In clause 4, the words “with the Board till date” shall be substituted with the words “or pre-filing offer document with the Board till date”.
XI. in Schedule V, after Form-C and before Form-D, the following Form-CA shall be inserted, namely-
“FORM CA – FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY THE LEAD MANAGER(S) AT THE TIME OF FILING THE UPDATED DRAFT RED HERRING
PROSPECTUS-I
[See regulation 59C (8) and 59C (13)]
To,
Securities and Exchange Board of India
Dear Sirs,
Sub.: Public/Rights Issue of………………………. by…………………………………… (Name of the issuer)
We confirm that:
(1) The updated draft red herring prospectus-I/updated draft red herring prospectus-II, as the case may be, filed with the Board contains all the material disclosures in respect of the issuer as on the said date.
(2) The registration of all intermediaries named in the offer document are valid as on date and that none of these intermediaries have been debarred by any regulatory authority.
(3) Written consent from the promoter(s) has been obtained for inclusion of their securities as part of promoters‘ contribution, subject to lock-in.
(0) The securities proposed to form part of the promoters‘ contribution and subject to lock-in, have not been disposed or sold or transferred by the promoters during the period starting from the date of filing the pre-filed draft offer document with the Board till date.
(4) Agreements have been entered into with the depositories for dematerialisation of the securities of the issuer.
Place:
Date:
Lead Manager(s) to the Issue
with Official Seal(s)”
XII. in Schedule V, after Form-D and before Form-E, the following Form DA shall be inserted, namely, –
“FORM DA – FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY THE LEAD MANAGER(S) IN THE EVENT OF DISCLOSURE OF MATERIAL EVENTS AFTER THE FILING OF THE OFFER DOCUMENT
[See regulation 59C (13)]
To,
Securities and Exchange Board of India
Dear Sirs,
Sub.: Public/Rights Issue of ……………………………………. by …………………………………… (Name of the issuer)
We confirm that all material disclosures in respect of the issuer as on date have been made through the pre-filed offer document filed with the Registrar of Companies on ….. (date) read with subsequent amendments/public notice dated…(copy of the advertisement enclosed).
Place:
Date:
Lead Manager(s) to the Issue with Official Seal(s)”
XIII. in Part A of Schedule VI, in paragraph (9) under the heading ―(K) Basis for Issue Price:”, the following shall be inserted after clause (2), namely, –
“(3) For all the Key Performance Indicators (KPIs) disclosed in the offer document, the Issuer Company and the lead merchant bankers (LMs) shall ensure the following:
(a) KPIs disclosed in the offer document and the terms used in KPIs shall be defined consistently and precisely in the ―Definitions and Abbreviations” section of the offer document using simple English terms /phrases so as to enable easy understanding of the contents. Technical terms, if any, used in explaining the KPIs shall be further clarified in simple terms.
(b) KPIs disclosed in the offer document shall be approved by the Audit Committee of the Issuer Company.
(c) KPIs disclosed in the offer document shall be certified by the statutory auditor(s) or Chartered Accountants or firm of Charted Accountants, holding a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India or by Cost Accountants, holding a valid certificate issued by the Peer Review Board of the Institute of Cost Accountants of India.
(d) Certificate issued with respect to KPIs shall be included in the list of material documents for inspection.
(e) For each KPI being disclosed in the offer document, the details thereof shall be provided for period which will be co-terminus with the period for which the restated financial information is disclosed in the offer document.
(f) KPIs disclosed in the offer document should be comprehensive and explanation shall be provided on how these KPIs have been used by the management historically to analyse, track or monitor the operational and/or financial performance of the Issuer Company.
(g) Comparison of KPIs over time shall be explained based on additions or dispositions to the business, if any. For e.g. in case the Issuer Company has undertaken a material acquisition or disposition of assets / business for the periods that are covered by the KPIs, the KPIs shall reflect and explain the same.
(h) For ‘Basis for Issue Price‘ section, the following disclosures shall be made:
(i) Disclosure of all the KPIs pertaining to the Issuer Company that have been disclosed to its investors at any point of time during the three years preceding to the date of filing of the DRHP / RHP.
(ii) Confirmation by the Audit Committee of the Issuer Company that verified and audited details for all the KPIs pertaining to the Issuer Company that have been disclosed to the earlier investors at any point of time during the three years period prior to the date of filing of the DR}IP / R}IP are disclosed under ‘Basis for Issue Price‘ section of the offer document.
(iii) Issuer Company in consultation with the lead merchant banker may make disclosure of any other relevant and material KPIs of the business of the Issuer Company as it deems appropriate that have a bearing for arriving at the basis for issue price.
(iv) Cross reference of KPIs disclosed in other sections of the offer document to be provided in the ‘Basis for Issue Price‘ section of the offer document.
(v) For the KPIs disclosed under the ‘Basis for Issue Price‘ section, disclosure of the comparison with Indian listed peer companies and/ or global listed peer companies, as the case may be (wherever available). The set of peer companies shall include companies of comparable size, from the same industry and with similar business model (if one to one comparison is not possible, appropriate notes to explain the differences may be included).
(i) The Issuer Company shall continue to disclose the KPIs which were disclosed in the ‗Basis for Issue Price‘ section of the offer document, on a periodic basis, at least once in a year (or for any lesser period as determined by the Issuer Company), for a duration that is at least the later of (i) one year after the listing date or period specified by the Board; or (ii) till the utilization of the issue proceeds as per the disclosure made in the objects of the issue section of the prospectus. Any change in these KPIs, during the aforementioned period, shall be explained by the Issuer Company. The ongoing KPIs shall continue to be certified by a member of an expert body as per clause 3(c).
(4) For issue price, floor price or price band, as the case may be, disclosed in the offer document, the Issuer Company and the lead merchant banker (LMs) shall disclose the details with respect to the following:
(a) Price per share of Issuer Company based on primary / new issue of shares (equity/convertible securities), excluding shares issued under ESOP/ESOS and issuance of bonus shares, during the 18 months preceding the date of filing of the DRHP / RHP, where such issuance is equal to or more than 5 per cent of the fully diluted paid-up share capital of the Issuer Company (calculated based on the pre-issue capital before such transaction/s and excluding employee stock options granted but not vested), in a single transaction or multiple transactions combined together over a span of rolling 30 days; and
(b) Price per share of Issuer Company based on secondary sale / acquisition of shares (equity/convertible securities), where promoter / promoter group entities or shareholder(s) selling shares through offer for sale in IPO or shareholder(s) having the right to nominate director(s) in the Board of the Issuer Company are a party to the transaction (excluding gifts), during the 18 months preceding the date of filing of the DRHP / RHP, where either acquisition or sale is equal to or more than 5 per cent of the fully diluted paid-up share capital of the Issuer Company (calculated based on the pre-issue capital before such transaction/s and excluding employee stock options granted but not vested), in a single transaction or multiple transactions combined together over a span of rolling 30 days .
Note: 1. In case there are no such transactions to report under (a) and (b), then the information shall be disclosed for price per share of the Issuer Company based on last 5 primary or secondary transactions (secondary transactions where promoter / promoter group entities or shareholder(s) selling shares through offer for sale in IPO or shareholder(s) having the right to nominate director(s) in the Board of the Issuer Company, are a party to the transaction), not older than 3 years prior to the date of filing of the DRHP / RHP, irrespective of the size of transactions.
2. Price per share disclosed, shall be adjusted for corporate actions e.g. split, bonus etc. done by the Issuer Company.
(c) Floor price and cap price being [●] times the weighted average cost of acquisition (WACA) based on primary/ secondary transaction(s) as disclosed in terms of clause (a) and (b) or Note 1 above, shall be disclosed in the following manner:
| Past Transactions | WACA (in Rs.) | IPO Floor Price in Rs. [●] | IPO Cap Price in Rs. [●] |
| WACA of Primary issuance | [●] times | [●] times | |
| WACA of Secondary transactions | [●] times | [●] times |
(d) Detailed explanation for offer price / cap price being [●] times of WACA of Primary issuance price / Secondary transaction price, along with comparison of Issuer Company‘s KPIs and financials ratios for the last three full financial years and stub period (if any) included in the offer document.
(e) Explanation for offer price / cap price being [●] times of WACA of Primary issuance price / Secondary transaction price in view of the external factors which may have influenced the pricing of the issue, if any.
(f) Table at para (c) above shall be disclosed in the Price Band Advertisement under ‘Risks to Investors‘ section. Recommendation of a Committee of Independent Directors to be included in the price band advertisement stating that the price band is justified based on quantitative factors / KPIs disclosed in ‘Basis for Issue Price‘ section vis-à-vis the WACA of primary issuance / secondary transaction(s) disclosed in ‘Basis for Issue Price‘ section.”
XIV. in Schedule IX, in the title, after words and number “regulation 42″, the number and symbols ―59C (8), 59C (9), 59C (13)” shall be inserted.
XV. in Schedule XVI, in the title, after words, numbers and symbols “regulation 25(6)”, the number and symbols “59E (3)” shall be inserted.
XVI. after Schedule XVI, the following Schedule (Schedule XVI-A) shall be inserted, namely-
“SCHEDULE XVI-A – NATURE OF CHANGES IN THE OFFER DOCUMENT REQUIRING FILING OF UPDATED OFFER DOCUMENT
[See regulation 59E (2)]
(1) Changes which require fresh filing of the pre-filed draft offer document or draft offer document with the Board, along with fees:
(a) If changes are made in the pre-filed draft offer document after receipt of observations or comments from the Board with respect to any of the following, the issuer shall file the fresh pre-filed draft offer document or draft offer document with the Board in terms of the applicable provisions of these regulations, along with the fees as specified in Schedule III:
(i) Change in the promoter of the issuer.
(ii) Change in more than half of the board of directors of the issuer.
(iii) Change in the main objects clause of the issuer.
(iv) Any addition to the objects of the issue resulting in an increase in the estimated issue size or estimated means of finance by more than fifty per cent.
(v) If there are grounds to believe that there is an exacerbation of risk on account of deletion of an object resulting in a decrease in issue size by more than fifty per cent.
(vi) In case of a fresh issue, any increase or decrease in the estimated issue size by more than fifty percent.
(vii) In case of an offer for sale, any increase or decrease in the number of shares offered for sale or the estimated issue size, by more than fifty percent.
(viii) In case of an issue comprising of both fresh issue and offer for sale, any increase or decrease in the respective limits as specified in clause (vi) and clause (vii).
(ix) Any increase in estimated deployment in any of the objects of the issue by more than twenty per cent.
(b) Changes which may result in non-compliance with the provisions of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 and the lead manager(s) or issuer do not intend to seek relaxation under regulation 303 of the said regulations.
(2) Changes which require filing of the updated pre-filed offer document with the Board, along with fees:
(a) If changes are made in the pre-filed offer document with respect to any of the following, the issuer shall file an updated offer document with the Board, along with payment of fees as specified in Schedule III:
(i) Section 1: Risk Factors: Any material development which may result in potential risk and may require updation in this section.
(ii) Section 2: Capital Structure: An aggregate increase of 5 percent or more in the shareholding of the promoter or promoter group or an aggregate increase of 5 per cent. or more in the shareholding of the top ten shareholders.
(iii) Section 3: Issue Size: Any addition or deletion to the objects of the issue resulting in a change in the estimated issue size or estimated means of finance by more than 10 percent and not exceeding 20 per cent.
(iv) Section 4: Management: Appointment of any new director.
(v) Section 5: Promoter Group: Any addition to the promoter group or group companies.
(vi) Section 6: Financial Statements: Any variation in net profit after tax or net loss and/ or extraordinary items in excess of 10 percent over the last updated financials included in the draft offer document.
(ix) Section 7: Legal and other information: Any new litigation or any development about a pending litigation which is considered material by the lead manager(s).
(b) After filing the updated offer document with the Board, the issuer may proceed with the issue after receiving a confirmation to this effect from the Board.
(3) Changes which require filing of the updated offer document with the Board, without fees:
All other changes or updations in the pre-filed offer document which are not covered under paras (1) and (2) above shall be carried out in the offer document and the updated offer document shall be filed with the Board without any fees.”
MADHABI PURI BUCH, Chairman
[ADVT.-III/4/Exty./422/2022-23]
Footnotes:
1. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 was published in the Gazette of India on September 11, 2018, vide notification No. SEBI/LAD-NRO/GN/2018/31.
2. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 was subsequently amended on –
(a) December 31, 2018 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2018, vide notification No. SEBI/LAD-NRO/GN/2018/57.
(b) March 29, 2019 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2019, vide notification No. SEBI/LAD-NRO/GN/2019/05.
(c) April 5, 2019 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2019, vide notification No. SEBI/LAD-NRO/GN/2019/08.
(d) July 29, 2019 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2019, vide notification No. SEBI/LAD-NRO/GN/2019/29.
(e) September 23, 2019 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2019, vide notification No. SEBI/LAD-NRO/GN/2019/35.
(f) December 6, 2019 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Fifth Amendment) Regulations, 2019, vide notification No. SEBI/LAD-NRO/GN/2019/42.
(g) December 26, 2019 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Sixth Amendment) Regulations, 2019, vide notification No. SEBI/LAD-NRO/GN/2019/47.
(h) January 1, 2020 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Seventh Amendment) Regulations, 2019, vide notification No. SEBI/LAD-NRO/GN/2020/01.
(i) April 17, 2020 by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2020 vide notification No. SEBI/LAD-NRO/GN/2020/10.
(j) May 8, 2020 by the Securities and Exchange Board of India (Payment of Fees) (Amendment) Regulations, 2020, vide notification No. SEBI/LAD-NRO/GN/2020/11.
(k) June 16, 2020 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2020, vide notification No. SEBI/LAD-NRO/GN/2020/17.
(l) June 22, 2020 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2020, vide notification No. SEBI/LAD-NRO/GN/2020/18.
(m) July 1, 2020 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2020, vide notification No. SEBI/LAD-NRO/GN/2020/21.
(n) September 28, 2020 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2020, vide notification No. SEBI/LAD-NRO/GN/2020/31.
(o) January 8, 2021 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2021, vide notification No. SEBI/LAD-NRO/GN/2021/03.
(p) May 5, 2021 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2021, vide notification No. SEBI/LAD-NRO/GN/2021/18.
(q) August 3, 2021 by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2021, vide notification No. SEBI/LAD-NRO/GN/2021/30.
(r) August 13, 2021 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2021, vide notification No. SEBI/LAD-NRO/GN/2021/45.
(s) October 26, 2021 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2021, vide notification No. SEBI/LAD-NRO/GN/2021/52.
(t) January 14, 2022 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2022, vide notification No. SEBI/LAD-NRO/GN/2022/63.
(u) April 27, 2022 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2022 vide notification No. SEBI/LAD-NRO/GN/2022/82.
(v) July 25, 2022 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2022 vide notification No. SEBI/LAD-NRO/GN/2022/90.
