Regulation 17 - Lock-in of specified securities held by persons other than the promoters - Securities And Exchange Board of India (Issue Of Capital And Disclosure Requirements) Regulations, 2018

Lock-in of specified securities held by persons other than the promoters 17. The entire pre-issue capital held by persons other than the promoters shall be locked-in for a period of 1 [ six months ] from the date of allotment in the initial public offer: Provided that nothing contained in this regulation shall apply to: a) equity shares allotted to employees, whether currently an employee or not, under an employee stock option or employee stock purchase scheme of the issuer prior to the initial public offer, if the issuer has made full disclosures with respect to such options or scheme in accordance with Part A of Schedule VI ; b) equity shares held by an employee stock option trust or transferred to the employees by an employee stock option trust pursuant to exercise of options by the employees, whether currently employees or not, in accordance with the employee stock option plan or employee stock purchase scheme. Provided that the equity shares allotted to the employees shall be subject to the provisions of lock-in as specified under the 6 [ Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ] . c) equity shares held by a venture capital fund or alternative investment fund of category I or Category II or a foreign venture capital investor: Provided that such equity shares shall be locked in for a period of at least 1 [ six months ] from the date of purchase by the venture capital fund or alternative investment fund alternative investment fund 2 [ of Category I or Category II ] or foreign venture capital investor. Explanation: 3 [ (i) ] For the purpose of clause (c), in case such equity shares have resulted pursuant to conversion of fully paid-up compulsorily convertible securities, the holding period of such convertible securities as well as that of resultant equity shares together shall be considered for the purpose of calculation of 4 [ six months period ] and convertible securities shall be deemed to be fully paid-up, if the entire consideration payable thereon has been paid and no further consideration is payable at the time of their conversion. 5 [ (ii) For the purpose of clause (c), in case such equity shares have resulted pursuant to a bonus issue, then the holding period of such equity shares against which the bonus issue is made as well as holding period of resultant bonus equity shares together shall be considered for the purpose of calculation of six months period, subject to the following: (a) that the bonus shares being issued out of free reserves and share premium existing in the books of account as at the end of the financial year preceding the financial year in which the draft offer document is filed with the Board; and (b) that the bonus shares not being issued by utilisation of revaluation reserves or unrealized profits of the issuer. ] ***************** NOTES:- 1. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/45. Dated 13-08-2021 before it was read as, one year 2. Inserted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 3. Numbered vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 4. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as, one year period 5. Inserted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 6. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/130 dated 23-05-2023 before it was read as, Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014