Regulation 86 - Restrictions on allotment - Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009

Restrictions on allotment. 86. (1) Allotment under the qualified institutions placement shall be made subject to the following conditions: (a) Minimum of ten per cent. of eligible securities shall be allotted to mutual funds: Provided that if the mutual funds do not subscribe to said minimum percentage or any part thereof, such minimum portion or part thereof may be allotted to other qualified institutional buyers; (b) No allotment shall be made, either directly or indirectly, to any qualified institutional buyer who is a promoter or any person related to promoters of the issuer: Provided that a qualified institutional buyer who does not hold any shares in the issuer and who has acquired the said rights in the capacity of a lender shall not be deemed to be a person related to promoters. (2) In a qualified institutions placement of non-convertible debt instrument along with warrants, an investor can subscribe to the combined offering of non- convertible debt instruments with warrants or to the individual securities, that is, either non- convertible debt instruments or warrants. (3) The applicants in qualified institutions placement shall not withdraw their bids after the closure of the issue. Explanation: For the purpose of clause (b) of sub-regulation (1), a qualified institutional buyer who has any of the following rights shall be deemed to be a person related to the promoters of the issuer: (a) rights under a shareholders agreement or voting agreement entered into with promoters or persons related to the promoters; (b) veto rights; or (c) right to appoint any nominee director on the board of the issuer.