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TMI BlogGuidelines for “Qualified Institutions Placement” – Amendments to SEBI (Disclosure and Investor Protection) {DIP} Guidelines, 2000X X X X Extracts X X X X X X X X Extracts X X X X ..... unds in domestic market by placing securities with Qualified Institutional Buyers (QIBs). Securities: Securities which can be issued through QIP are equity shares or any securities other than warrants, which are convertible into or exchangeable with equity shares (hereinafter referred to as "specified securities"). A security which is convertible into or exchangeable with equity shares at a later date, may be converted or exchanged into equity shares at any time after allotment of security but not later than sixty months from the date of allotment. The specified securities shall be made fully paid up at the time of allotment. Investors / Allottees: The specified securities can be issued only to Qualified Institutional Buyers (QIBs), as defined under sub-clause (v) of clause 2.2.2B of the SEBI (DIP) Guidelines. Such QIBs shall not be promoters or related to promoters of the issuer, either directly or indirectly. Each placement of the specified securities issued through QIP shall be on private placement basis, in compliance with the requirements of first proviso to clause (a) of sub-section (3) of Section 67 of the Companies Act, 1956. A minimum of 10% of the securities in each pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns have been given effect to by introducing Chapter XIIIA in the SEBI (DIP) Guidelines, 2000. A copy of Chapter XIIIA is enclosed herewith at Annexure I. 3. The amendments made vide this circular shall come into force with immediate effect. 4. This circular is being issued in exercise of the powers conferred under sub-section (1) of Section 11 of the Securities and Exchange Board of India Act, 1992. 5. This circular is available on SEBI website at www.sebi.gov.in under the category "Legal Framework". The entire text of the SEBI (DIP) Guidelines, 2000, including the amendments issued vide this circular, is available on SEBI website under the categories "Legal Framework" and "Issues and Listing". Yours faithfully, Neelam Bhardwaj Encl.: a/a ANNEXURE I CHAPTER XIII-A OF THE SEBI (DIP) GUIDELINES, 2000 GUIDELINES FOR QUALIFIED INSTITUTIONS PLACEMENT (QIP) 13A.1 Applicability 13A.1.1 This Chapter shall apply to any issue of equity shares / fully convertible debentures (FCDs) / partly convertible debentures (PCDs) or any securities other than warrants, which are convertible into or exchangeable with equity shares at a later date (hereinafter referred to as "specified securitie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... weekly high and low of the closing prices of the related shares quoted on the stock exchange during the two weeks preceding the relevant date. Explanation: a) "relevant date" for the purpose of this clause means the day which is thirty days prior to the date on which the meeting of general body of shareholders is held, in terms of sub-section (1A) of Section 81 of the Companies Act, 1956 or other applicable provision to consider the proposed issue. b) "stock exchange" for the purpose of this clause means any of the recognised stock exchanges in which the equity shares of the issuer of the same class are listed and in which the highest trading volume in such shares has been recorded during the six months immediately preceding the relevant date. 13A.3.2 Pricing of shares on conversion 13A.3.2.1 Where securities which are convertible into or exchangeable with equity shares at a later date are issued pursuant to this Chapter, the issuer shall determine the price of the resultant shares in terms of clause 13A.3.1 above, subject to clause 13A.3.2.2. 13A.3.2.2 The relevant date for the above purpose may, at the option of the issuer, be either the one referred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial information, including the information specified in Schedule XXIA. 13A.7.3 The placement document shall be a private document provided to select investors, through serially numbered copies. 13A.7.4 The placement document shall also be placed on the website of the concerned stock exchange and of the issuer with a disclaimer to the effect that it is in connection with an issue to QIBs under this Chapter and that no offer is being made to the public or to any other category of investors. 13A.7.5 A copy of the placement document shall be filed with the Board for record purpose within 30 days of the allotment of specified securities. 13A.8 Number of allottees 13A.8.1 The minimum number of allottees for each placement of specified securities made pursuant to this Chapter shall not be less than: (a) two, where the issue size is less than or equal to ₹ 250 crores; (b) five, where the issue size is greater than ₹ 250 crores. Provided that no single allottee shall be allotted more than 50% of the issue size. Provided further that QIBs belonging to the same group or those who are under common control shall be deemed to be a single allottee for the purpose of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.12.2 The issuer shall also furnish to each stock exchange on which the same class of shares or other securities are listed, a certificate stating that the issue is being made pursuant to this Chapter and complies with its requirements, along with the application made for seeking in-principle approval for listing of the specified securities. 13A.12.3 The issuer shall also furnish to each stock exchange on which the same class of shares or other securities are listed, the documents, undertakings, etc, if any, specified in the listing agreement for the purpose of seeking in-principle approval and final permission from Stock Exchanges for listing of the specified securities. 13A.13 Non-applicability of Chapter XIII 13A.13.1 Nothing contained in Chapter XIII shall apply to an issue of specified securities made pursuant to this Chapter. SCHEDULE XXIA [Clause 13A.7.2 ] DISCLOSURES IN PLACEMENT DOCUMENT 1.Disclaimer to the effect that the Memorandum relates to an issue made to Qualified Institutional Buyers under Chapter XIIIA and that no offer is being made to the public or any other class of investors. 2. Glossary of Terms/Abbreviations 3. [Financial Statements Contained Herei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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