Regulation 7 - General conditions - Securities And Exchange Board of India (Issue Of Capital And Disclosure Requirements) Regulations, 2018

General conditions 7. (1) An issuer making an initial public offer shall ensure that: a) it has made an application to one or more stock exchanges to seek an in-principle approval for listing of its specified securities on such stock exchanges and has chosen one of them as the designated stock exchange, in terms of Schedule XIX ; b) it has entered into an agreement with a depository for dematerialisation of the specified securities already issued and proposed to be issued; c) all its specified securities held by the promoters are in dematerialised form prior to filing of the offer document; d) all its existing partly paid-up equity shares have either been fully paid-up or have been forfeited; e) it has made firm arrangements of finance through verifiable means towards seventy five per cent. of the stated means of finance for a specific project proposed to be funded from the issue proceeds, excluding the amount to be raised through the proposed public issue or through existing identifiable internal accruals. (2) The amount for general corporate purposes, 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. Explanation: 1 [ For the purposes of regulation 6 and regulation 7 ] : (I) project means the object for which monies are proposed to be raised to cover the objects of the issue; (II) In case of an issuer which had been a partnership firm or a limited liability partnership, the track record of operating profit of the partnership firm or the limited liability partnership shall be considered only if the financial statements of the partnership business for the period during which the issuer was a partnership firm or a limited liability partnership, conform to and are revised in the format prescribed for companies under the Companies Act, 2013 and also comply with the following: (a) adequate disclosures are made in the financial statements as required to be made by the issuer as per schedule III of the Companies Act, 2013 ; (b) the financial statements are duly certified by the statutory auditor stating that: (i) the accounts and the disclosures made are in accordance with the provisions of schedule III of the Companies Act, 2013 ; (ii) the applicable accounting standards have been followed; (iii) the financial statements present a true and fair view of the firm s accounts; (III) In case of an issuer formed out of a division of an existing company, the track record of distributable profits of the division spun-off shall be considered only if the requirements regarding financial statements as provided for partnership firms or limited liability partnerships in Explanation (II) are complied with. 2 [ (3) 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 or investments are made in the draft offer document and the offer document at the time of filing of offer documents. ] ************* NOTES:- 1. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as For the purposes of this regulation 2. Inserted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022