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SEBI amends norms governing rights issues – rationalising eligibility, disclosures and other concepts
The Securities and Exchange Board of India (SEBI) has notified the fourth amendment to the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (SEBI ICDR Regulations) on 28 September 2020 (Amendment) with the intention of permitting listed companies to undertake rights issues with brevity. The Amendment eases the eligibility requirements, significantly truncates the disclosure regime and introduces supportive changes to existing legal norms, applicable to rights issues.
Chirayu Chandani
Chirayu Chandani is a Partner in the Capital Markets Practice Group in the Mumbai office. Chirayu’s experience includes capital market transactions including domestic offerings and international offerings by Indian companies.
He has represented issuers and underwriters on capital market transactions such as initial public offerings, follow-on public offerings, rights issues, private placements of equity shares and offer for sale transactions on the stock exchange platform(s).
REITs and InvITs: SEBI introduces norms for de-classifying sponsors, induction of a sponsor and relaxes sponsor lock-in requirements
India’s capital markets regulator, the Securities and Exchange Board of India (SEBI) has, on 16 June 2020, notified amendments (Amendments) to the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 (InvIT Regulations) and Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 (REIT Regulations).
SEBI notifies temporary relaxations to fast track further public offers
In order to allow a larger group of listed companies to raise funds from the public, during the testing times brought about by COVID-19, the Securities and Exchange Board of India (SEBI) has issued a circular dated 9 June 2020 (Circular). The Circular has relaxed the eligibility conditions applicable to fast track further public offers by listed companies (Fast Track FPOs).
To not only regulate and protect but also promote SEBI aids public & rights issue during testing times
The Covid-19 pandemic has resulted in a near extinction of primary market fundraising by companies in India. While the Indian government and domestic regulators have limited ability to influence resultant flux in valuations, the Securities & Exchange Board of India (SEBI) has arguably met expectations in aiding capital market transactions at such time, predominantly by easing the legal route to accessing public funds.
SEBI continues to augment the legal framework and facilitate fund raisings by listed REITS through rights issues preferential allotments and institutional placements
As part of its consistent efforts to boost the product, the Securities and Exchange Board of India (SEBI) had permitted listed real estate investment trusts (REIT) to raise funds from the primary market through follow on public offerings, preferential issues, institutional placements and rights issues. The legal framework supporting such fund raising routes have been notified by SEBI from time to time.
The Rights Issue process – supplemented and simplified
Securities and Exchange Board of India (SEBI) has recently notified amendments to the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 to make the rights issue process more efficient and effective, and to reduce the overall time taken to undertake a rights issue, from approximately 55 days to approximately 31 days (the Amendment). Our ERGO on the Amendment can be accessed here.