SEBI approves amendments to facilitate ease of doing business for companies coming for IPOs

SEBI

Market regulator ,Securities and Exchange Board of India (SEBI) amended SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018 to facilitate ease of doing business for companies going for initial public offerings (IPOs) or fund raising.

The first amendment that has been made is doing away with the requirement of a one percent security deposit in public/rights issues of equity shares. Further, promoter group entities and non-individual shareholders holding more than five percent of the post-offer equity share capital are to be permitted to contribute towards minimum promoters’ contribution (MPC) without being identified as a promoter.

Also, equity shares from the conversion of compulsorily convertible securities held for a year before filing the DRHP, are to be considered for meeting MPC requirements.

The regulator further said in the press release, “The increase or decrease in size of an offer for sale (OFS) requiring fresh filing shall be based on only one of the criteria i.e. either issue size in rupees or number of shares, as disclosed in the draft offer document. "

The regulator has also provided flexibility for extending bid/offer closing date due to force majeure events by setting the requirement to one day. Earlier it required a minimum of three days to extend the closing date.