Regulation 99 - Eligibility conditions - Securities And Exchange Board of India (Issue Of Capital And Disclosure Requirements) Regulations, 2018

PART IX: FAST TRACK RIGHTS ISSUE Eligibility conditions 99. Unless otherwise specified, nothing contained in sub-regulations (1), (2), (4) and (5) of regulation 71 shall apply if the issuer satisfies the following conditions for making a rights issue through the fast track route - a) the equity shares of the issuer have been listed on any stock exchange for a period of at least three years immediately preceding the reference date; b) the entire shareholding of the promoter group of the issuer is held in dematerialised form on the reference date; c) the average market capitalisation of public shareholding of the issuer is at least two hundred and fifty crore rupees; 3 [ in at least one of the recognized stock exchanges with nationwide trading terminal, where its securities are listed; ] d) the annualised trading turnover of the equity shares of the issuer during six calendar months immediately preceding the month of the reference date has been at least two per cent. of the weighted average number of equity shares listed during such six months period: Provided that for issuers, whose public shareholding is less than fifteen per cent. of its issued equity capital, the annualised trading turnover of its equity shares has been at least two per cent. of the weighted average number of equity shares available as free float during such six months period; e) the annualized delivery-based trading turnover of the equity shares during six calendar months immediately preceding the month of the reference date has been at least ten per cent. of the annualized trading turnover of equity shares during such six months period; f) the issuer has been in compliance with the equity listing agreement or the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 , as applicable, for a period of at least three years immediately preceding the reference date: Provided that if the issuer has not complied with the provisions of the listing agreement or the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 , as applicable, relating to composition of board of directors, for any quarter during the last three years immediately preceding the reference date, but is compliant with such provisions at the time of filing of letter of offer, and adequate disclosures are made in the letter of offer about such non-compliances during the three years immediately preceding the reference date, it shall be deemed as compliance with the condition; Provided further that imposition of only monetary fines by stock exchanges on the issuer shall not be a ground for ineligibility for undertaking issuances under this regulation; g) the issuer has redressed at least ninety five per cent. of the complaints received from the investors till the end of the quarter immediately preceding the month of the reference date; 1 [ (h) that no show-cause notices, excluding proceedings for imposition of penalty, have been issued by the Board and pending against the issuer or its promoters or whole-time directors as on the reference date.; In cases where against the issuer or its promoters or whole-time directors, i) show-cause notice(s) has been issued by the Board 4 [ or the Adjudicating Officer, ] in a proceeding for imposition of penalty; or ii) prosecution proceedings have been initiated by the Board; necessary disclosures in respect of such action(s) along-with its potential adverse impact on the issuer shall be made in the letter of offer. ] 5 [ (i) if the issuer or the promoter or the promoter group or the director of the issuer has settled any alleged violations of securities laws through the settlement mechanism of the Board in the past three years immediately preceding the reference date, then the disclosure of such compliance of the settlement order, shall be made in the letter of offer; ] j) the equity shares of the issuer have not been suspended from trading as a disciplinary measure during last three years immediately preceding the reference date; k) there shall be no conflict of interest between the lead manager(s) and the issuer or its group companies in accordance with the applicable regulations. l) the promoters and promoter group shall mandatorily subscribe to their rights entitlement and shall not renounce their rights, except to the extent of renunciation within the promoter group or for the purpose of complying with minimum public shareholding norms prescribed under the Securities Contracts (Regulation) Rules, 1957 ; 2 [ (m) for audit qualifications, if any, in respect of any of the financial years for which accounts are disclosed in the letter of offer, the issuer shall provide the restated financial statements adjusting for the impact of the audit qualifications. Further, 6 [ **** ] for the qualifications wherein impact on the financials cannot be ascertained the same shall be disclosed appropriately in the letter of offer.; ] Explanation: For the purpose of this regulation: (i) average market capitalisation of public shareholding means the sum of daily market capitalisation of public shareholding for a period of one year up to the end of the quarter preceding the month in which the proposed issue was approved by the shareholders or the board of the issuer, as the case may be, divided by the number of trading days. (ii) public shareholding shall have the same meaning as assigned to it under the Securities Contracts (Regulation) Rules, 1957 . (iii) reference date means the date of filing the letter of offer with the designated stock exchange. (iv) audit qualifications for this regulation shall be those disclosed under applicable accounting standard relating to modification to the opinion in the independent auditor s report and requires a qualified opinion, adverse opinion or disclaimer of opinion for material misstatements. ************* NOTES:- 1. Substituted vide Notifivation No. SEBI/LAD-NRO/GN/2020/31 dated 28-09-2020 before it was read as h) that no show-cause notices have been issued or prosecution proceedings have been initiated by the Board and pending against the issuer or its promoters or whole-time directors as on the reference date; 2. Substituted vide Notifivation No. SEBI/LAD-NRO/GN/2020/31 dated 28-09-2020 before it was read as m) there are no audit qualifications on the audited accounts of the issuer in respect of those financial years for which such accounts are disclosed in the letter of offer. 3. Inserted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 4. Inserted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 5. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as i) the issuer or promoter or promoter group or director of the issuer has not settled any alleged violation of securities laws through the consent or settlement mechanism with the Board during three years immediately preceding the reference date; 6. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as that