Regulation 4 - General conditions - Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009

CHAPTER II COMMON CONDITIONS FOR PUBLIC ISSUES AND RIGHTS ISSUES General conditions. 4. (1) Any issuer offering specified securities through a public issue or rights issue shall satisfy the conditions of this Chapter at the time of filing draft offer document with the Board (unless stated otherwise in this Chapter) and at the time of registering or filing the final offer document with the Registrar of Companies or designated stock exchange, as the case may be. (2) No issuer shall make a public issue or rights issue of specified securities: (a) if the issuer, any of its promoters, promoter group or directors or persons in control of the issuer are debarred from accessing the capital market by the Board; (b) if any of the promoters, directors or persons in control of the issuer was or also is a promoter, director or person in control of any other company which is debarred from accessing the capital market under any order or directions made by the Board; (c) 1 [***] (d) unless it has made an application to one or more recognised stock exchanges for listing of specified securities on such stock exchanges and has chosen one of them as the designated stock exchange: Provided that in case of an initial public offer, the issuer shall make an application for listing of the specified securities in at least one recognised stock exchange having nationwide trading terminals; (e) unless it has entered into an agreement with a depository for dematerialisation of specified securities already issued or proposed to be issued; (f) unless all existing partly paid-up equity shares of the issuer have either been fully paid up or forfeited; (g) unless firm arrangements of finance through verifiable means towards seventy five per cent. of the stated means of finance, excluding the amount to be raised through the proposed public issue or rights issue or through existing identifiable internal accruals, have been made. 2 [(3) Warrants may be issued along with public issue or rights issue of specified securities subject to the following: (a) the tenure of such warrants shall not exceed 3 [eighteen] months from their date of allotment in the public/rights issue; (b) not more than one warrant shall be attached to one specified security 4 [;] ] (c) 5 [the price or conversion formula of the warrants shall be determined upfront and at least 25% of the consideration amount shall also be received upfront; (d) in case the warrant holder does not exercise the option to take equity shares against any of the warrants held by him, the consideration paid in respect of such warrant shall be forfeited by the issuer.] 6 [(4) The amount for general corporate purposes, as mentioned in objects of the issue in the draft offer document filed with the Board, shall not exceed twenty five per cent of the amount raised by the issuer by issuance of specified securities.] 7 [(5) No issuer shall make, (a) a public issue of equity securities, if the issuer or any of its promoters or directors is a wilful defaulter; or (b) a public issue of convertible debt instruments if, (i) the issuer or any of its promoters or directors is a wilful defaulter, or (ii) it is in default of payment of interest or repayment of principal amount in respect of debt instruments issued by it to the public, if any, for a period of more than six months. (6) An issuer making a rights issue of specified securities, shall make disclosures as specified in Part G of Schedule VIII, in the offer document and abridged letter of offer, if the issuer or any of its promoters or directors is a wilful defaulter. (7) In case of a rights issue of specified securities referred to in sub-regulation (6) above, the promoters or promoter group of the issuer, shall not renounce their rights except to the extent of renunciation within the promoter group.] ******* 1 Clause (c) omitted by SEBI (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2016, w.e.f. 25.05.2016. Prior to its omission, clause (c) read as under: (c) if the issuer of convertible debt instruments is in the list of wilful defaulters published by the Reserve Bank of India or it is in default of payment of interest or repayment of principal amount in respect of debt instruments issued by it to the public, if any, for a period of more than six months; 2 Inserted by SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2012, w.e.f. 30.01.2012. 3 Substituted for twelve by the SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2015, w.e.f. 24.03.2015. 4 Substituted for . by the SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2015, w.e.f. 24-3-2015. 5 Clauses (c) and (d) inserted by the SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2015, w.e.f. 24-3-2015. 6 Inserted by SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2012, w.e.f. 12.10.2012. 7 Inserted by SEBI (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2016, w.e.f. 25.05.2016.