Securities and Exchange Board of India
Measures to further facilitate fund raising from capital markets in the backdrop of COVID-19 pandemic
In the wake of challenges for the Indian economy arising out of the Covid-19 pandemic and with a view to improving access to funding to the corporates through capital markets, SEBI has decided to grant certain temporary relaxations from the regulatory provisions related to rights/ public issuances by listed entities.
A. Rights Issues
1. Fast track Rights issuances
Towards expanding the universe of listed entities for the purpose of fast track rights issuances, SEBI has relaxed the following conditions:
2. Minimum Subscription
3. Threshold for not filing draft letter of offer with SEBI
These relaxations are applicable to right issues that open on or before March 31, 2021. It may be recalled that last year SEBI had amended ICDR regulations to significantly reduce the timeline for the completion of the Rights Issue from T+ 55 days to T+ 31 days as well as introduced the dematerialization and trading of rights entitlements. These measures would make the rights issue framework more effective and efficient.
B. Flexibility on Issue size
An issuer, whose offer document is pending receipt of SEBI observation, shall be permitted to increase or decrease the fresh issue size by up to 50% of the estimated issue size (instead of the present limit of 20%) without requiring to file fresh draft offer document with the Board. The relaxation shall be applicable for all offer documents pending receipt of SEBI observations upto December 31, 2020.
C. Validity of SEBI observations
Considering the prevailing economic scenario and based on requests from various industry bodies, it has been decided to extend the validity of SEBI observations on all public issues/ rights issues by six months from the date of expiry for issuers whose observation has expired/ shall expire between March 01, 2020 and September 30, 2020.
To summarize, these measures are aimed at expanding the universe of listed entities that are eligible for raising funds through fast track rights issuances, reducing the time involved and providing greater flexibility in fund raising apart from easing compliance requirements.
Circulars issued by SEBI in regard to aforesaid measure are available on SEBI website at www.sebi.gov.in under the category – ‘Legal – Circulars’.
April 21, 2020
|SEBI extends timelines for compliance by its trading/clearing members||Circular No. SEBI/HO/MIRSD/DOP/CIR/P/2020/68||21/04/2020|
|SEBI relaxes ICDR Regulations for Right Issues Opened till 31.03.2020||Circular No. SEBI/HO/CFD/CIR/CFD/DIL/67/2020||21/04/2020|
|One-time relaxation with respect to validity of SEBI Observations||Circular No. SEBI/HO/CFD/CIR/DIL/CIR/P/2020/66||21/04/2020|