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TMI BlogOTHER ISSUE REQUIREMENTSX X X X Extracts X X X X X X X X Extracts X X X X ..... romoter from his own funds. If the project is to be implemented in stages, the promoters' contribution as per these requirements shall be with respect to total equity participation till the respective stage vis-àvis the debt raised or proposed to be raised through the issue.) 8(c) The issuer company shall agree to comply with the requirements of continuing disclosures as specified under the listing agreement to be entered into with concerned stock exchanges as is applicable for listing of equity shares.) 9(d) The issuer company shall agree to obtain prior consent of the holders of the Convertible Debt Instruments, through special resolution to be passed at the general meeting of the Convertible Debt Instrument holders, for change in terms of issue, change in capital structure and change in shareholding pattern.) 10(e) There shall be no partly paid up shares/ other securities at the time of filing of draft offer document with the Board and also at time of filing Red Herring Prospectus and Prospectus with ROC. Provided that in case of a public issue of securities by a listed company satisfying all the requirements specified in clause 2.1.2A, there shall be no partly paid u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e may be, of the postissue capital.) 8.3.2 24(In case of a public issue by a listed company, the net offer to public shall be at least 10% or 25%, as the case may be, of the issue size.) 8.3.3 25(Clauses 8.3.1 and 8.3.2 shall not apply to - a) an infrastructure company, satisfying the requirements specified in subclause (iii) of clause 2.4.1, inviting subscription from public; and b) a government company, statutory authority or corporation or any special purpose vehicle set up by any of them, which is engaged in infrastructure sector. Explanation: For the purpose of sub-clause (b) above, the term "Infrastructure sector" shall have the same meaning as assigned to it in Explanation to proviso to sub-clause (i) of clause 3.7.1.) 26(8.3.4) The issuer company is free to make reservations and/or firm allotments to various categories of persons mentioned hereafter for the remaining of the issue size subject to other relevant provisions of these guidelines. Explanation: 1. The expression "reservation" shall mean reservation on Competitive Basis wherein allotment of shares is made in proportion to the shares applied for by the concerned reserved categories. 2. Reservation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board for relaxation from applicability of clause (b) to sub-rule (2) of Rule 19 of the Securities Contracts (Regulation) Rules, 1957 for listing of its shares without making an initial public offer if it satisfies the following conditions: i. Shares have been allotted by the unlisted company (transferee company) to the holders of securities of a listed company (transferor company) pursuant to a scheme of reconstruction or amalgamation under the provision of the Companies Act, 1956 and such scheme has been sanctioned by the High Court/s of the Judicature. ii. The listing of the shares of the unlisted transferee company is in terms of scheme of arrangement sanctioned by the High Court/s of the Judicature. iii. Atleast 25% of the paid up share capital, post scheme, of the unlisted transferee company seeking listing comprises shares allotted to the public holders of shares in the listed transferor company. iv. The unlisted company has not issued/reissued any shares, not covered under the scheme. v. There are no outstanding warrants/instruments/agreements which gives right to any person to take the shares in the unlisted transferee company at any future date. If there are such ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wide circulation at the place where the registered office of the company is situated, giving details as specified in Schedule XXVIII.) 37(8.3.5.2 Application by a listed company for listing of equity shares with differential rights as to dividend, voting or otherwise. 38(8.3.5.2.1 A listed company may make an application to the Board for relaxation from applicability of clause (b) to sub-rule (2) of Rule 19 of the Securities Contracts (Regulation) Rules, 1957 for listing of its equity shares with differential rights as to dividend, voting or otherwise, without making an initial public offer of such equity shares, if it satisfies the following conditions: i. issue of such equity shares are made to all the existing shareholders as on record date by way of rights or bonus; ii. the issuer is in compliance with the conditions of minimum public shareholding requirement with reference to the equity shares already listed and the equity shares with differential rights proposed to be listed; iii. the issuer undertakes to disclose the shareholding pattern of the equity shares with differential rights separately under clause 35 of the Equity Listing Agreement.) 39(8.3.5.3 Application by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gories] shall not make an application in the ` net public offer' category. b) i) An applicant in the net public category cannot make an application for that number of securities exceeding the number of securities offered to the public. ii) In the case of reserved categories, a single applicant in the reserved category can make an application for a number of security which exceeds the reservation. c) i) Any unsubscribed portion in any reserved category may be added to any other reserved category. ii) The unsubscribed portion, if any, after such inter se adjustments amongst the reserved categories shall be added back to the net offer to the public. d) In case of undersubscription in the net offer to the public portion, spillover to the extent of undersubscription shall be permitted from the reserved category to the net public offer portion. e) If any person to whom firm allotment is proposed to be made withdraws partially or fully from the offer made to him after filing of the prospectus with the Registrar of Companies, the extent of shares proposed to be allotted to such person, shall be taken up by the promoters and the subscription amount shall be brought in at least one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctured in such a manner that the entire subscription money is called within 12 months from the date of allotment. b) If the investor fails to pay call money within 12 months the subscription money already paid may be forfeited. c) If the issue size is above ₹ 500 crores and is subject to monitoring requirement as per Clause 8.17.1 of this Chapter, it shall not be necessary to call the entire subscription money within 12 months. 8.7 Restriction on further Capital Issues 8.7.1 No company shall make any further issue of capital in any manner whether by way of issue of bonus shares, preferential allotment, rights issue or public issue or otherwise, during the period commencing from the submission of offer document to the Board on behalf of the company for public or rights issues, till the securities referred to in the said offer document have been listed or application moneys refunded on account of non-listing or undersubscription, etc. 49(unless full disclosures regarding the total capital to be raised from such further issues are made in the draft offer document.) 50(Provided that in case of a fast track issue, no such further issue of capital shall be made during the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the offer document. 52(Provided that nothing contained in this clause shall apply to a fast track issue.) 8.10 Retention of Oversubscription 8.10.1 The quantum of issue whether through a rights or a public issue, shall not exceed the amount specified in the prospectus/ letter of offer. Provided that an oversubscription to the extent of 10% of the net offer to public is permissible for the purpose of rounding off to the nearer multiple of 100 while finalising the allotment. 8.11 Underwriting 8.11.1 The issuers have the option to have a public issue underwritten by the underwriter. 8.11.2 In respect of every underwritten issue, the lead merchant banker(s) shall accept a minimum underwriting obligation of 5% of the total underwriting commitment or ₹ 25 lacs whichever is less. 8.12 Updation of Offer Document 8.12.1 The Lead Merchant Banker shall ensure that the particulars as per audited statements contained in the offer document are not more than 6 months old from issue opening date. 8.12.2 In respect of a Government company making a public issue, the auditors report in the prospectus shall not be more than six months old as on the date of filing of the prospec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uy Back Arrangement 8.18.1 Any safety net scheme or buy-back arrangements of the shares proposed in any public issue shall be finalised by issuer company with the lead merchant banker in advance and disclosed in the prospectus. 8.18.2 Such buy back or safety net arrangements shall be made available only to all original resident individual allottees. 8.18.3 Such buy back or safety net facility shall be limited upto a maximum of 1000 shares per allottee and the offer shall be valid at least for a period of 6 months from the last date of despatch of securities. 8.18.4 The financial capacity of the person making available buy back or safety net facility shall be disclosed in the draft prospectus 55(and/or red herring prospectus and prospectus filed with ROC.) 8.19 Utilisation of funds in case of Rights Issues 8.19.1 56(The issuer company may utilise the funds collected in the rights issue only after the basis of allotment is finalised.) 8.20 Option to Receive Securities in Dematerialised Form 8.20.1 The Lead merchant Banker shall incorporate a statement in the offer document and in the application form to the effect that the investors have an option to either receive securit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crores, shall be eligible to apply for listing of securities only on those stock exchange(s) where trading of securities is screen-based. 8.1.2 The issuer company shall appoint market maker(s) on all the stock exchanges where the securities are proposed to be listed. 8.1.3 The appointment of market makers shall be subject to the following :- i. At least one market maker undertakes to make market for a minimum period of 18 months and at least one additional market maker undertakes to make market for a minimum period of 12 months from the date on which the securities are admitted to dealing. ii. Market makers undertake to offer buy and sell quotes for a minimum depth of 3 marketable lots; iii. Market makers undertake to ensure that the bid-ask spread (difference between quotations for sale and purchase) for their quotes shall not at any time exceed 10%: iii. The inventory of the market makers on each of such stock exchanges, as on the date of allotment of securities, shall be at least 5% of the proposed issue of the company. 8.1.4 The unlisted companies whose capital after the proposed issue of securities is less than ₹ 3 crores shall be eligible to be listed only on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the form of equity. Such equity participation may be brought by the promoter from his own funds or from other sources, subject to the condition that at least 20% of the issue size is brought by way of equity by the promoter from his own funds. In case, the project is to be implemented in stages, the promoters contribution as per these requirements shall be with respect to total equity participation till the respective stage vis a vis the debt raised or proposed to be raised through the issue) c) The issuer company shall agree to comply with the requirements of continuing disclosures as specified under the listing agreement to be entered into with concerned stock exchanges as is applicable for listing of equity shares. d) The issuer company shall agree to obtain prior consent of the holders of the NCDS through special resolution to be passed at the general meeting of the NCDS holders for change in terms of issue, change in capital structure and change in shareholding pattern. e) There shall be no partly paid up shares/other securities at the time of filing of draft offer document with the Board 3(and also at time of filing red herring prospectus and prospectus with ROC). 3(P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pal Corporation which has no share capital may be subject to the provisions of sub-clauses (a), (b) and (c) of Clause 8.2.1, make a public issue of NCDS and list the same on the stock exchange/s." 5 Substituted vide SEBI Circular No. SEBI/CFD/DIL/DIP/32/2008/28/08 dated August 28, 2008 for the words "DSCE". 6 Substituted vide SEBI Circular No. SEBI/CFD/DIL/DIP/32/2008/28/08 dated August 28, 2008 for the following: "The provisions of clauses (a) to (e) of clause 8.2.1 shall be mutatis mutandis complied with." 7 Inserted sub-clause, vide SEBI Circular No. SEBI/CFD/DIL/DIP/32/2008/28/08 dated August 28, 2008. 8 Inserted sub-clause, vide SEBI Circular No. SEBI/CFD/DIL/DIP/32/2008/28/08 dated August 28, 2008. 9 Inserted sub-clause, vide SEBI Circular No. SEBI/CFD/DIL/DIP/32/2008/28/08 dated August 28, 2008. 10 Inserted sub-clause, vide SEBI Circular No. SEBI/CFD/DIL/DIP/32/2008/28/08 dated August 28, 2008. 11 Renumbered sub-clause "8.2.3(b)" as sub-clause "8.2.3(f)", vide SEBI Circular No. SEBI/CFD/DIL/DIP/32/ 2008/28/08 dated August 28, 2008. 12 Substituted vide SEBI Circular No. SEBI/CFD/DIL/DIP/32/2008/28/08 dated August 28, 2008 for the word "DSCE". 13 Substituted vide SEB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide SEBI Circular No. SEBI/CFD/DIL/DIP/ 27/2007/10/7 dated July 10, 2007 for the following: "An infrastructure company, satisfying the requirements in Clause 2.4.1 (iii) of Chapter II, inviting subscription from public shall not attract the provisions of Clauses 8.3.1and 8.3.2 above." In the above clause, the words "shall not attract the provisions of Clauses 8.3.1and 8.3.2 above" were substituted vide SEBI Circular No. RMB (Compendium) Series Circular No. 1 dated July 17, 2001 for the following: "may not be required to offer at least 25% of its securities to public for subscription as required under rule 19(2)(b) of SC(R) Rules, 1957" . 26 Omitted the following Clause no. 8.3.4 and renumbered Clause no. 8.3.5 as 8.3.4, vide SEBI Circular No. RMB (Compendium) Series Circular No. 1 dated July 17, 2001: "8.3.4 In case of public issues or offers for sale of equity shares or securities convertible at a later date into equity by unlisted companies 299('in any of the eligible sector)' at least 10% of the securities issued by such company may be offered to the public subject to the following:- (i) minimum twenty lacs securities are offered to the public (excluding res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EBI Circular No. SEBI/CFD/DIL/DIP/13/2004/28/5 dated May 28, 2004 for the following: "Permanent employees (including working directors) of the company and in the case of a new company the permanent employees of the promoting companies." 28 Inserted vide SEBI Circular No. SEBI/CFD/DIL/DIP/13/2004/28/5 dated May 28, 2004. 29 Substituted vide SEBI Circular No. SEBI/CFD/DIL/DIP/28/2007/29/11 dated November 29, 2007 for the words "the shareholders who, on the record date ( date fixed for the purpose of determining the eligible shareholders) , are holding shares worth up to ₹ 50,000/- determined on the basis of closing price as on the previous day". 30 Inserted clauses 8.3.5, 8.3.5.1, 8.3.5.2, 8.3.5.3 and 8.3.5.4 vide SEBI Circular No. RMB (Compendium) Series Circular No. 1 dated July 17, 2001. 31 Omitted the words "by an unlisted company", vide SEBI Circular No. SEBI/CFD/DIL/DIP/34/2009/24/09 dated February 24, 2009. 32 Inserted vide SEBI Circular No. SEBI/CFD/DIL/DIP/34/2009/24/09 dated February 24, 2009. 33 Renumbered clause "8.3.5.1" as clause "8.3.5.1.1", vide SEBI Circular No. SEBI/CFD/DIL/DIP/34/2009/24/09 dated February 24, 2009. 34 Omitted the following clause vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 10/- each." 46 Substituted vide SEBI Circular No. SEBI/CFD/DIL/DIP/13/2004/28/5 dated May 28, 2004 for the following: "Where the public issue is at a premium or comprises security, whether convertible or non-convertible, or the public issue is of more than one security, the minimum application moneys payable in respect of each security by each applicant, shall not be less than ₹ 2000/- irrespective of the size of premium subject to applications being for a multiple of tradeable lots;" 47 Substituted vide SEBI Circular No. SEBI/CFD/DIL/DIP/13/2004/28/5 dated May 28, 2004 for the following: "The successful applicants shall be issued by the issuer company share certificates/ instruments for eligible number of shares in tradeable lots." 48 Omitted the following sub-clauses and sub-clause (v) renumbered as sub-clause (iv) and sub-clause (vii) renumbered as sub-clause (v), vide SEBI Circular No. SEBI/CFD/DIL/DIP/13/2004/28/5 dated May 28, 2004: "(iv) The minimum tradeable lot, in case of shares of face value of ₹ 10/- each, shall at the option of the issuer/offeror, be fixed on the basis of offer price as given below: Provided that the maximum tradeable lot ..... 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