SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2018

In exercise of? the? powers? conferred? by? section? 30? of? the Securities and Exchange? Board? of? India Act, 1992 (15 of 1992), the Board hereby makes? the following regulations, namely:

CHAPTER I - PRELIMINARY

Regulation - 1. Short title and commencement

(1)     These regulations may be called the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.

(2)     They shall come into force on the sixtieth day from the date of its publication in the Official Gazette.

Regulation - 2. Definitions

(1)     In these regulations, unless the context otherwise requires:

(a)         ?Act? means the Securities and Exchange Board of India Act, 1992 [15 of 1992];

(b)         ?advertisement? includes notices, brochures, pamphlets, show cards, catalogues, hoardings, placards, posters, insertions in newspaper, pictures and films in any print media or electronic media, radio, television programme;

(c)         ?anchor investor" means a qualified institutional buyer who makes an application for a value of at least ten crore rupees in a public issue on the main board made through the book building process in accordance with these regulations or makes an application for a value of at least two crore rupees for an issue made in accordance with Chapter IX of these regulations;

(d)         ?application supported by blocked amount (ASBA)? means an application for subscribing to a public issue or rights issue, along with an authorisation to self-certified syndicate bank to block the application money in a bank account;

(e)         ?associate? means a person which is an associate of the issuer and as defined under the Companies Act, 2013;

(f)          ?Board? means the Securities and Exchange Board of India established under the Act;

(g)         ?book building? means a process undertaken to elicit demand and to assess the price for determination of the quantum or value or coupon of specified securities or Indian Depository Receipts, as the case may be, in accordance with these regulations;

(h)         ?composite issue? means an issue of specified securities by a listed issuer on public-cum- rights basis, wherein the allotment in both public issue and rights issue is proposed to be made simultaneously;

(i)           ?control? shall have the same meaning as assigned to it under the Securities and Exchange Board of India (Substantial Acquisitions of Shares and Takeovers) Regulations, 2011;

(j)          ?convertible debt instrument? means an instrument which creates or acknowledges indebtedness and is convertible into equity shares of the issuer at a later date at or without the option of the holder of the instrument, whether constituting a charge on the assets of the issuer or not;

(k)         ?convertible security? means a security which is convertible into or exchangeable with equity shares of the issuer at a later date, with or without the option of the holder of such security and includes convertible debt instrument and convertible preference shares;

(l)           ?designated stock exchange? means a recognised stock exchange having nationwide trading terminals chosen by the issuer on which securities of an issuer are listed or proposed to be listed for the purpose of a particular issue of specified securities under these regulations: Provided that, the issuer may choose a different recognised stock exchange as a designated stock exchange for any subsequent issue of specified securities;

(m)      ?draft letter of offer? means the draft letter of offer filed with the Board in relation to a? rights issue under these regulations;

(n)         ?draft offer document? means the draft offer document filed with the Board in relation to a public issue under these regulations;

(o)         ?employee? means a permanent employee, working in India or outside India, of the issuer or of the promoters or subsidiary company of the issuer, or a director of the issuer, whether whole-time or not and does not include (i) promoters, (ii) a person belonging to the promoter group; or (iii) a director who either himself/herself or through their relatives or through any body corporate, directly or indirectly, holds more than ten per cent. of the outstanding equity shares of the issuer;

Provided that for the purposes of stock option schemes, employee shall have the same meaning as assigned to under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;

(p)         ?fugitive economic offender? shall mean an individual who is declared a fugitive economic offender under section 12 of the Fugitive Economic Offenders Act, 2018 (17 of 2018);

(q)         ?further public offer? means an offer of specified securities by a listed issuer to the public for subscription and includes an offer for sale of specified securities to the public by any existing holders of such specified securities in a listed issuer;

(r)          ?general corporate purposes? include such identified purposes for which no specific amount is allocated or any amount so specified towards general corporate purpose or any such purpose by whatever name called, in the draft offer document, draft letter of offer, or the offer document:

Provided that any issue related expenses shall not be considered as a part of general corporate purpose merely because no specific amount has been allocated for such expenses in the draft offer document, draft letter of offer or the offer document;

(s)         ?green shoe option? means an option of allotting equity shares in excess of the equity shares offered in the public issue as a post-listing price stabilizing mechanism;

(t)          "group companies", shall include such companies (other than promoter(s) and subsidiary/subsidiaries) with which there were related party transactions, during the period for which financial information is disclosed, as covered under the applicable accounting standards, and also other companies as considered material by the board of the issuer;

(u)         ?housing finance company? means a deposit taking housing finance company registered with the National Housing Bank for carrying on the business of housing finance;

(v)         ?infrastructure sector? shall include the following facilities/services:

i)                            transportation (including inter modal transportation), including the following:

A)           roads, national highways, state highways, major district roads, other district roads and village roads, including toll roads, bridges, highways, road transport providers and other road-related services;

B)           rail system, rail transport providers, metro rail roads and other railway related services;

C)           ports (including minor ports and harbours), inland waterways, coastal shipping including shipping lines and other port related services;

D)          aviation, including airports, heliports, airlines and other airport related services;

E)           logistics services;

ii)                        agriculture, including the following:

A)           infrastructure related to storage facilities;

B)           construction relating to projects involving agro-processing and supply of inputs to agriculture;

C)           construction for preservation and storage of processed agro-products, perishable goods such as fruits, vegetables and flowers including testing facilities for quality;

iii)                     water management, including the following:

A)           water supply or distribution;

B)           irrigation;

C)           water treatment, etc.

iv)                    telecommunication, including the following:

A)           basic or cellular, including radio paging;

B)           domestic satellite service (i.e., satellite owned and operated by an Indian company for providing telecommunication service);

C)           network of trunking, broadband network and internet services;

v)                       industrial, commercial and social development and maintenance, including the following:

A)           real estate development, including an industrial park or special economic zone;

B)           tourism, including hotels, convention centres and entertainment centres;

C)           public markets and buildings, trade fair, convention, exhibition, cultural centres,? sports and recreation infrastructure, public gardens and parks;

D)          construction of educational institutions and hospitals;

E)           other urban development, including solid waste management systems, sanitation and sewerage systems, etc.;

vi)                    power, including the following:

A)           generation of power through thermal, hydro, nuclear, fossil fuel, wind and other renewable sources;

B)           transmission, distribution or trading of power by laying a network of new transmission or distribution lines;

vii)                 petroleum and natural gas, including the following:

A)           exploration and production;

B)           import terminals;

C)           liquefaction and re-gasification;

D)          storage terminals;

E)           transmission networks and distribution networks including city gas infrastructure;

viii)              housing, including the following:

A)           urban and rural housing including public or mass housing, slum rehabilitation etc;

B)           other allied activities such as drainage, lighting, laying of roads, sanitation facilities etc.;

ix)                    services provided by recognised stock exchanges and registered depositories, in relation to securities;

x)                       other miscellaneous facilities or services, including the following:

A)           mining and related activities;

B)           technology related infrastructure;

C)           manufacturing of components and materials or any other utilities or facilities required by the infrastructure sector like energy saving devices and metering devices, etc.;

D)          environment related infrastructure;

E)           disaster management services;

F)            preservation of monuments and icons;

G)          emergency services (including medical, police, fire, and rescue);

xi)                    such other facility or service which, in the opinion of the board, constitutes infrastructure sector;

(w)      ?initial public offer? means an offer of specified securities by an unlisted issuer to the public for subscription and includes an offer for sale of specified securities to the public by any existing holders of such specified securities in an unlisted issuer;

(x)        [1][?innovators growth platform? means the trading platform for listing and trading of specified securities of issuers that comply with the eligibility criteria specified in regulation 283;]

(y)        ?institutional investor? means (i) qualified institutional buyer; or (ii) family trust or intermediaries registered with the Board, with net worth of more than five hundred crore rupees, as per the last audited financial statements, for the purposes of listing and/or trading on [2][innovators growth platform] in terms of Chapter X;

(z)         ?issue size? includes offer through offer document and promoters? contribution brought in as part of the issue;

(aa)     ?issuer? means a company or a body corporate authorized to issue specified securities under the relevant laws and whose specified securities are being issued and/or offered for sale in accordance with these regulations;

(bb)     ?key managerial personnel? means the officers or personnel of the issuer who are members of its core management team (excluding board of directors) and includes members of the management one level below the executive directors of the issuer, functional heads and ?key managerial personnel? as defined under the Companies Act, 2013 or any other person whom the issuer may declare as a key managerial personnel;

(cc)      ?lead manager? means a merchant banker registered with the Board and appointed by the issuer to manage the issue and in case of a book built issue, the lead manager(s) appointed by the issuer shall act as the book running lead manager(s) for the purposes of book building;

(dd)     ?listed issuer? means an issuer whose equity shares are listed on a recognised stock? exchange having nationwide trading terminals;

(ee)     ?main board? means a recognised stock exchange having nationwide trading terminals, other than SME exchange;

(ff)        ?net offer? means an offer of specified securities to the public but does not include reservations and promoters? contribution brought in as part of the issue;

(gg)     ?net tangible assets? mean the sum of all net assets of the issuer, excluding intangible assets as defined in Accounting Standard 26 (AS 26) or Indian Accounting Standard (Ind AS) 38, as applicable, issued by the Institute of Chartered Accountants of India;

(hh)     ?net worth? means the aggregate value of the paid-up share capital and all reserves created out of the profits and securities premium account and debit or credit balance of profit and loss account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation;

(ii)         ?nominated investor? means a qualified institutional buyer or private equity fund, who? enters into an agreement with the lead manager(s) to subscribe to an issue, made in accordance with Chapter IX, in case of under-subscription or to receive or deliver the specified securities in the market-making process in such an issue;

Explanation: ?private equity fund? means a fund registered with any regulatory authority or a fund established by any person registered with any regulatory authority;

(jj)        ?non-institutional investor? means an investor other than a retail individual investor and qualified institutional buyer;

(kk)     ?offer document? means a red herring prospectus, prospectus or shelf prospectus, as applicable, referred to under the Companies Act, 2013, in case of a public issue, and a letter of offer in case of a rights issue;

(ll)         ?offer through offer document? means net offer and reservations;

(mm)      ?persons acting in concert? shall have the same meaning as assigned to it under regulation 2(1)(q) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

(nn)     ?preferential issue? means an issue of specified securities by a listed issuer to any select person or group of persons on a private placement basis in accordance with Chapter V of these regulations and does not include an offer of specified securities made through employee stock option scheme, employee stock purchase scheme or an issue of sweat equity shares or depository receipts issued in a country outside India or foreign securities;

(oo)     ?promoter? shall include a person:

i)   who has been named as such in a draft offer document or offer document or is identified by the issuer in the annual return referred to in section 92 of the Companies Act, 2013; or

ii)   who has control over the affairs of the issuer, directly or indirectly whether as a shareholder, director or otherwise; or

iii)   in accordance with whose advice, directions or instructions the board of directors of the issuer is accustomed to act:

Provided that nothing in sub-clause (iii) shall apply to a person who is acting merely in a professional capacity;

Provided further that a financial institution, scheduled commercial bank, [foreign portfolio investor other than individuals, corporate bodies and family offices][3], mutual fund, venture capital fund, alternative investment fund, foreign venture capital investor, insurance company registered with the Insurance Regulatory and Development Authority of India or any other category as specified by the Board from time to time, shall not be deemed to be a promoter merely by virtue of the fact that twenty per cent. or more of the equity share capital of the issuer is held by such person unless such person satisfy other requirements prescribed under these regulations;

(pp)     ?promoter group? includes:

i)              the promoter;

ii)            an immediate relative of the promoter (i.e. any spouse of that person, or any parent, brother, sister or child of the person or of the spouse); and

iii)          in case promoter is a body corporate:

A)           a subsidiary or holding company of such body corporate;

B)           any body corporate in which the promoter holds twenty per cent. or more of the equity share capital; and/or any body corporate which holds twenty per cent. or more of the equity share capital of the promoter;

C)           any body corporate in which a group of individuals or companies or combinations thereof acting in concert, which hold twenty per cent. or more of the equity share capital in that body corporate and such group of individuals or companies or combinations thereof also holds twenty per cent. or more of the equity share capital of the issuer and are also acting in concert; and

iv)          in case the promoter is an individual:

A)           any body corporate in which twenty per cent. or more of the equity share capital is held by the promoter or an immediate relative of the promoter or a firm or Hindu Undivided Family in which the promoter or any one or more of their relative is a member;

B)           any body corporate in which a body corporate as provided in (A) above holds twenty per cent. or more, of the equity share capital; and

C)           any Hindu Undivided Family or firm in which the aggregate share of the promoter and their relatives is equal to or more than twenty per cent. of the total capital;

v)            all persons whose shareholding is aggregated under the heading "shareholding of the promoter group":

Provided that a financial institution, scheduled bank, [foreign portfolio investor other than individuals, corporate bodies and family offices][4], mutual fund, venture capital fund, alternative investment fund, foreign venture capital investor, insurance company registered with the Insurance Regulatory and Development Authority of India or any other category as specified by the Board from time to time, shall not be deemed to be promoter group merely by virtue of the fact that twenty per cent. or more of the equity share capital of the promoter is held? by? such person or entity:

Provided further that such financial institution, scheduled bank, [foreign portfolio investor other than individuals, corporate bodies and family offices][5], mutual fund, venture capital fund, alternative investment fund and foreign venture capital investor insurance company registered with the Insurance Regulatory and Development Authority of India or any other category as specified by the Board from time to time shall be treated as promoter group for the subsidiaries or companies promoted by them or for the mutual fund sponsored by them;

(qq)     ?public financial institution? means a public financial institution as defined under the Companies Act, 2013;

(rr)       ?public issue? means an initial public offer or a further public offer;

(ss)      ??qualified institutional buyer? means:

(i)           a mutual fund, venture capital fund, alternative investment fund and foreign venture capital investor registered with the Board;

(ii)         [foreign portfolio investor other than individuals, corporate bodies and family offices][6];

(iii)       a public financial institution;

(iv)       a scheduled commercial bank;

(v)         a multilateral and bilateral development financial institution;

(vi)       a state industrial development corporation;

(vii)     an insurance company registered with the Insurance Regulatory and Development Authority of India;

(viii)    a provident fund with minimum corpus of twenty five crore rupees;

(ix)       a pension fund with minimum corpus of twenty five crore rupees;

(x)         National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated November 23, 2005 of the Government of India published in the Gazette of India;

(xi)       insurance funds set up and managed by army, navy or air force of the Union of India; and

(xii)     insurance funds set up and managed by the Department of Posts, India; and

(xiii)    systemically important non-banking financial companies.

(tt)        ?qualified institutions placement? means issue of eligible securities by a listed issuer to qualified institutional buyers on a private placement basis and includes an offer for sale of specified securities by the promoters and/or promoter group on a private placement basis, in terms of these regulations;

(uu)     ?relative? means a relative as defined under the Companies Act, 2013.

(vv)     ?retail individual investor? means an individual investor who applies or bids for specified securities for a value of not more than two lakhs rupees;

(ww)  ?retail individual shareholder? means a shareholder who applies or bids for specified securities for a value of not more than two lakhs rupees;

(xx)     ?rights issue? means an offer of specified securities by a listed issuer to the shareholders of the issuer as on the record date fixed for the said purpose;

(yy)     ?schedule? means schedule annexed to these regulations;

(zz)      ?scheduled commercial bank? means scheduled commercial banks as included in the second schedule to the Reserve Bank of India Act, 1934;

(aaa) ?self-certified syndicate bank? means a banker to an issue registered with the Board, which offers the facility of ASBA;

(bbb) ?selling shareholder(s)? means any shareholder of the issuer who is offering for sale the specified securities in a public issue in accordance with these Regulations;

(ccc)   ?securities laws? means the Act, the Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996 and the rules and regulations made thereunder and the general or special orders, guidelines or circulars made or issued by the Board thereunder and the provisions of the Companies Act, 2013 or any previous company law and any subordinate legislation framed thereunder, which are administered by the Board ;

(ddd) ?SME exchange? means a trading platform of a recognised stock exchange having nationwide trading terminals permitted by the Board to list the specified securities issued in accordance with Chapter IX and includes a stock exchange granted recognition for this purpose but does not include the Main Board;

(eee) ?specified securities" means equity shares and convertible securities;

[7][(eeea) ?SR equity shares? means the equity shares of an issuer having superior voting rights compared to all other equity shares issued by that issuer.]

(fff)      ?stabilising agent? means a merchant banker who is responsible for stabilising the price of equity shares under a green shoe option, in terms of these regulations;

(ggg) ?stock exchange? means any recognised stock exchange having nationwide trading terminals chosen by the issuer on which securities of an issuer are listed or proposed to be listed for the purpose of a particular issue of specified securities under these regulations, other than an SME exchange;

(hhh)?syndicate member? means an intermediary registered with the Board and who? is? permitted to accept bids, applications and place orders with respect to the issue and carry on the activity as an underwriter;

(iii)        ?systemically important non-banking financial companies? means a non-banking financial company registered with the Reserve Bank of India and recognised as systemically important non-banking financial company by the Reserve Bank of India;

(jjj)      ?unlisted issuer? means an issuer which is not a listed issuer;

(kkk) ?valuer? means a person who is registered under section 247 of the Companies Act, 2013 and the relevant rules framed thereunder or as specified by the Board;

(lll)        ?wilful defaulter? means a person or an issuer who or which is categorized as a wilful defaulter by any bank or financial institution (as defined under the Companies Act, 2013) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India;

(mmm)                        ?working day? means all days on which commercial banks in the city as specified in the offer document are open for business;

Explanation: For the purpose of this clause, in respect of -

(a)         announcement of price band; and

(b)        bid/issue period,working day shall mean all days, excluding Saturdays, Sundays and public holidays, on which commercial banks in the city as notified in the offer document are open for business;

(c)         the time period between the bid/ issue closing date and the listing of the specified securities on the stock exchanges, working day shall mean all trading days of the stock exchanges, excluding Sundays and bank holidays, as per circulars issued by the Board.

(2)?? All other words and expressions used but not defined in these regulations, but defined in??? the Act or the Companies Act, 2013, the Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996 and/or the rules and regulations made thereunder shall have the same meaning as respectively assigned to them in such statutes or rules or regulations or any statutory modification or re-enactment thereto, as the case may be.

Regulation - 3. Applicability of the regulations

Unless otherwise provided, these regulations shall apply to the following:

(a)         an initial public offer by an unlisted issuer;

(b)         a rights issue by a listed issuer; where the aggregate value of the issue is [8][fifty crore] rupees or more;

(c)         a further public offer by a listed issuer;

(d)         a preferential issue by a listed issuer;

(e)         a qualified institutions placement by a listed issuer;

(f)          an initial public offer of Indian depository receipts;

(g)         a rights issue of Indian depository receipts;

(h)        an initial public offer by a small and medium enterprise;

(i)           a listing on the [9][innovators growth platform] through an issue or without an issue; and

(j)          a bonus issue by a listed issuer.

Provided that in case of rights issue of size less than [10][fifty crores] rupees, the issuer shall prepare the letter of offer in accordance with requirements as specified in these regulations and file the same with the Board for information and dissemination on the Board?s website.

Provided further that these regulations shall not apply to issue of securities under clause (b), (d) and (e) of sub-regulation (1) of regulation 9 of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

CHAPTER II - INITIAL PUBLIC OFFER ON MAIN BOARD

PART I: ELIGIBILITY REQUIREMENTS

Regulation - 4. Reference date

Unless otherwise provided in this Chapter, an issuer making an initial public offer of specified securities shall satisfy the conditions of this Chapter as on the date of filing of the draft offer document with the Board and also as on the date of [11][filing] the offer document with the Registrar of Companies.

Regulation - 5. Entities not eligible to make an initial public offer

(1)     An issuer shall not be eligible to make an initial public offer ?

(a)         if the issuer, any of its promoters, promoter group or directors or selling shareholders are debarred from accessing the capital market by the Board.

(b)         if any of the promoters or directors of the issuer is a promoter or director of any other company which is debarred from accessing the capital market by the Board.

(c)         if the issuer or any of its promoters or directors is a wilful defaulter.

(d)         if any of its promoters or directors is a fugitive economic offender.

Explanation: The restrictions under (a) and (b) above shall not apply to the persons or entities mentioned therein, who were debarred in the past by the Board and the period of debarment is already over as on the date of filing of the draft offer document with the Board.

(2)     An issuer shall not be eligible to make an initial public offer if there are any outstanding convertible securities or any other right which would entitle any person with any option to receive equity shares of the issuer:

Provided that the provisions of this sub-regulation shall not apply to:

(a)   outstanding options granted to employees, whether currently an employee or not, pursuant to an employee stock option scheme in compliance with the Companies Act, 2013, the relevant Guidance Note or accounting standards, if any, issued by the Institute of Chartered Accountants of India or pursuant to the Companies Act, 2013, in this regard;

(b)   fully paid-up outstanding convertible securities which are required to be converted on or before the date of filing of the red herring prospectus (in case of book-built issues) or the prospectus (in case of fixed price issues), as the case may be.

Regulation - 6. Eligibility requirements for an initial public offer

(1)     An issuer shall be eligible to make an initial public offer only if:

a)        it has net tangible assets of at least three crore rupees, calculated on a restated and consolidated basis, in each of the preceding three full years (of twelve months each), of which not more than fifty per cent. are held in monetary assets:

Provided that if more than fifty per cent. of the net tangible assets are held in monetary assets, the issuer has utilised or made firm commitments to utilise such excess monetary assets in its business or project;

Provided further that the limit of fifty per cent. on monetary assets shall not be applicable in case the initial public offer is made entirely through an offer for sale.

b)       it has an average operating profit of at least fifteen crore rupees, calculated on a restated and consolidated basis, during the preceding three years (of twelve months each), with operating profit in each of these preceding three years;

c)       it has a net worth of at least one crore rupees in each of the preceding three full years (of twelve months each), calculated on a restated and consolidated basis;

d)       if it has changed its name within the last one year, at least fifty per cent. of the revenue, calculated on a restated and consolidated basis, for the preceding one full year has been earned by it from the activity indicated by its new name.

(2)     An issuer not satisfying the condition stipulated in sub-regulation (1) shall be eligible to make an initial public offer only if the issue is made through the book-building process and the issuer undertakes to allot at least seventy five per cent. of the net offer to qualified institutional buyers and to refund the full subscription money if it fails to do so.

(3)     [12][If an issuer has issued SR equity shares to its promoters/ founders, the said issuer shall be allowed to do an initial public offer of only ordinary shares for listing on the Main Board subject to compliance with the provisions of this Chapter and these clauses ?

(i)   the issuer shall be intensive in the use of technology, information technology, intellectual property, data analytics, bio-technology or nano-technology to provide products, services or business platforms with substantial value addition.

(ii)   the SR shareholder shall not be part of the promoter group whose collective net worth is more than rupees 500 crores:

Explanation: While determining the collective net worth, the investment of SR shareholder in the shares of the issuer company shall not be considered.

(iii)   The SR shares were issued only to the promoters/ founders who hold an executive position in the issuer company;

(iv)  The issue of SR equity shares had been authorized by a special resolution passed at a general meeting of the shareholders of the issuer, where the notice calling for such general meeting specifically provided for ?

(a)                    the size of issue of SR equity shares,

(b)                    ratio of voting rights of SR equity shares vis-?-vis the ordinary shares,

(c)                     rights as to differential dividends, if any

(d)                    sunset provisions, which provide for a time frame for the validity of such SR equity shares,

(e)                    matters in respect of which the SR equity shares would have the same voting right as that of the ordinary shares,

(v)   The SR equity shares have been held for a period of atleast 6 months prior to the filing of the red herring prospectus;

(vi)  The SR equity shares shall have voting rights in the ratio of a minimum of 2:1 upto a maximum of 10:1 compared to ordinary shares and such ratio shall be in whole numbers only;

(vii)  The SR equity shares shall have the same face value as the ordinary shares;

(viii)  The issuer shall only have one class of SR equity shares;

(ix)  The SR equity shares shall be equivalent to ordinary equity shares in all respects, except for having superior voting rights.]

Regulation - 7. General conditions

(1)     An issuer making an initial public offer shall ensure that:

a)            it has made an application to one or more stock exchanges to seek an in-principle approval for listing of its specified securities on such stock exchanges and has chosen one of them as the designated stock exchange, in terms of Schedule XIX;

b)            it has entered into an agreement with a depository for dematerialisation of the specified securities already issued and proposed to be issued;

c)            all its specified securities held by the promoters are in dematerialised form prior to filing of the offer document;

d)            all its existing partly paid-up equity shares have either been fully paid-up or have been forfeited;

e)            it has made firm arrangements of finance through verifiable means towards seventy five per cent. of the stated means of finance for a specific project proposed to be funded from the issue proceeds, excluding the amount to be raised through the proposed public issue or through existing identifiable internal accruals.

(2)     The amount for general corporate purposes, as mentioned in objects of the issue in the draft offer document and the offer document shall not exceed twenty five per cent. of the amount being raised by the issuer.

??????????

Explanation: For the purposes of this regulation:

(1)      ?project? means the object for which monies are proposed to be raised to cover the objects of the issue;

(2)      In case of an issuer which had been a partnership firm or a limited liability partnership, the track record of operating profit of the partnership firm or the limited liability partnership shall be considered only if the financial statements of the partnership business for the period during which the issuer was a partnership firm or a limited liability partnership, conform to and are revised in the format prescribed for companies under the Companies Act, 2013 and also comply with the following:

(a)     adequate disclosures are made in the financial statements as required to be made by the issuer as per schedule III of the Companies Act, 2013;

(b)     the financial statements are duly certified by the statutory auditor stating that:

(i)   the accounts and the disclosures made are in accordance with the provisions of schedule III of the Companies Act, 2013;

(ii)   the applicable accounting standards have been followed;

(iii)   the financial statements present a true and fair view of the firm?s accounts;

(3)      In case of an issuer formed out of a division of an existing company, the track record of distributable profits of the division spun-off shall be considered only if the requirements regarding financial statements as provided for partnership firms or limited liability partnerships in Explanation (II) are complied with.

Regulation - 8. Additional conditions for an offer for sale

Only such fully paid-up equity shares may be offered for sale to the public, which have been held by the sellers for a period of at least one year prior to the filing of the draft offer document: Provided that in case the equity shares received on conversion or exchange of fully paid-up compulsorily convertible securities including depository receipts are being offered for sale, the holding period of such convertible securities, including depository receipts, as wellas that of resultant equity shares together shall be considered for the purpose of calculation of one year period referred in this sub-regulation.

Provided further that such holding period of one year shall be required to be complied with at the time of filing of the draft offer document.

Explanation: If the equity shares arising out of the conversion or exchange of the fully ?paid-up compulsorily convertible securities are being offered for sale, the conversion or exchange should be completed prior to filing of the offer document (i.e. red herring prospectus in the case of a book built issue and prospectus in the case of a fixed price issue), provided full disclosures of the terms of conversion or exchange are made in the draft offer document.

Provided further that the requirement of holding equity shares for a period of one year shall not apply:

a)        in case of an offer for sale of a government company or statutory authority or corporation or any special purpose vehicle set up and controlled by any one or more of them, which is engaged in the infrastructure sector;

b)        if the equity shares offered for sale were acquired pursuant to any scheme approved by a High Court under the sections 391 to 394 of Companies Act, 1956, or approved by a tribunal or the Central Government under the sections 230 to 234 of Companies Act, 2013, as applicable, in lieu of business and invested capital which had been in existence for a period of more than one year prior to approval of such scheme;

c)        if the equity shares offered for sale were issued under a bonus issue on securities held for a period of at least one year prior to the filing of the draft offer document with the Board and further subject to the following:

(i)   such specified securities being issued out of free reserves and share premium existing in the books of account as at the end of the financial year preceding the financial year in which the draft offer document is filed with the Board; and

(ii)   such equity shares not being issued by utilisation of revaluation reserves or unrealized profits of the issuer.

PART II: ISSUE OF CONVERTIBLE DEBT INSTRUMENTS AND WARRANTS

Regulation - 9. Eligibility requirements for issue of convertible debt instruments

An issuer shall be eligible to make an initial public offer of convertible debt instruments even without making a prior public issue of its equity shares and listing thereof.

Provided that it is not in default of payment of interest or repayment of principal amount in respect of debt instruments issued by it to the public, if any, for a period of more than six months.

Regulation - 10. Additional requirements for issue of convertible debt instruments

(1)     In addition to other requirements laid down in these regulations, an issuer making an initial public offer of convertible debt instruments shall also comply with the following conditions:

(a)          it has obtained credit rating from at least one credit rating agency;

(b)          it has appointed at least one debenture trustee in accordance with the provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993;

(c)           it shall create a debenture redemption reserve in accordance with the provisions of the Companies Act, 2013 and rules made thereunder;

(d)          if the issuer proposes to create a charge or security on its assets in respect of secured convertible debt instruments, it shall ensure that:

(1)      such assets are sufficient to discharge the principal amount at all times;

(2)      such assets are free from any encumbrance;

(3)      where security is already created on such assets in favour of any existing lender or security trustee or the issue of convertible debt instruments is proposed to be secured by creation of security on a leasehold land, the consent of such lender or security trustee or lessor for a second or pari passu charge has been obtained and submitted to the debenture trustee before the opening of the issue;

(4)      the security or asset cover shall be arrived at after reduction of the liabilities having a first or prior charge, in case the convertible debt instruments are secured by a second or subsequent charge.

(2)     The issuer shall redeem the convertible debt instruments in terms of the offer document.

Regulation - 11. Conversion of optionally convertible debt instruments into equity shares

(1)     The issuer shall not convert its optionally convertible debt instruments into equity shares unless the holders of such convertible debt instruments have sent their positive consent to the issuer and non-receipt of reply to any notice sent by the issuer for this purpose shall not be construed as consent for conversion of any convertible debt instruments.

(2)     Where the value of the convertible portion of any listed convertible debt instruments issued by an issuer exceeds ten crore rupees and the issuer has not determined the conversion price of such convertible debt instruments at the time of making the issue, the holders of such convertible debt instruments shall be given the option of not converting the convertible portion into equity shares:

Provided that where the upper limit on the price of such convertible debt instruments and justification thereon is determined and disclosed to the investors at the time of making the issue, it shall not be necessary to give such option to the holders of the convertible debt instruments for converting the convertible portion into equity share capital within the said upper limit.

(3)     Where an option is to be given to the holders of the convertible debt instruments in terms of sub-regulation (2) and if one or more of such holders do not exercise the option to convert the instruments into equity share capital at a price determined in the general meeting of the shareholders, the issuer shall redeem that part of the instruments within one month from the last date by which option is to be exercised, at a price which shall not be less than its face value.

(4)     The provision of sub-regulation (2) shall not apply if such redemption is as per the disclosures made in the offer document.

Regulation - 12. Issue of convertible debt instruments for financing

An issuer shall not issue convertible debt instruments for financing or for providing loans to or for acquiring shares of any person who is part of the promoter group or group companies:

Provided that an issuer shall be eligible to issue fully convertible debt instruments for these purposes if the period of conversion of such debt instruments is less than eighteen months from the date of issue of such debt instruments.

Regulation - 13. Issue of warrants

(1)     An issuer shall be eligible to issue warrants in an initial public offer subject to the following:

(a)      the tenure of such warrants shall not exceed eighteen months from the date of their allotment in the initial public offer;

(b)      a specified security may have one or more warrants attached to it;

(c)      the price or formula for determination of exercise price of the warrants shall be determined upfront and disclosed in the offer document and at least twenty-five per cent. of the consideration amount based on the exercise price shall also be received upfront;

Provided that in case the exercise price of warrants is based on a formula, twenty-five per cent. consideration amount based on the cap price of the price band determined for the linked equity shares or convertible securities shall be received upfront.

(d)      in case the warrant holder does not exercise the option to take equity shares against any of the warrants held by the warrant holder, within three months from the date of payment of consideration, such consideration made in respect of such warrants shall be forfeited by the issuer.

PART III: PROMOTERS? CONTRIBUTION

Regulation - 14. Minimum promoters? contribution

(1)     The promoters of the issuer shall hold at least twenty per cent. of the post-issue capital: Provided that in case the post-issue shareholding of the promoters is less than twenty per cent., alternative investment funds or foreign venture capital investors or scheduled commercial banks or public financial institutions or insurance companies registered with Insurance Regulatory and Development Authority of India may contribute to meet the shortfall in minimum contribution as specified for the promoters, subject to a maximum of ten per cent. of the post-issue capital without being identified as promoter(s).

Provided further that the requirement of minimum promoters? contribution shall not apply in case an issuer does not have any identifiable promoter.

(2)     The minimum promoters? contribution shall be as follows:

(a)          the promoters shall contribute twenty per cent. as stipulated in sub-regulation (1), as the case may be, either by way of equity shares [13][, including SR equity shares held, if any,] or by way of subscription to convertible securities:

Provided that if the price of the equity shares allotted pursuant to conversion is not pre-determined and not disclosed in the offer document, the promoters shall contribute only by way of subscription to the convertible securities being issued in the public issue and shall undertake in writing to subscribe to the equity shares pursuant to conversion of such securities.

(b)          in case of any issue of convertible securities which are convertible or exchangeable on different dates and if the promoters? contribution is by way of equity shares (conversion price being pre-determined), such contribution shall not be at a price lower than the weighted average price of the equity share capital arising out of conversion of such securities.

(c)           subject to the provisions of clause (a) and (b) above, in case of an initial public offer of convertible debt instruments without a prior public issue of equity shares, the promoters shall bring in a contribution of at least twenty per cent. of the project cost in the form of equity shares, subject to contributing at least twenty per cent. of the issue size from their own funds in the form of equity shares:

Provided that if the project is to be implemented in stages, the promoters? contribution shall be with respect to total equity participation till the respective stage vis-?-vis the debt raised or proposed to be raised through the public issue.

(3)     The promoters shall satisfy the requirements of this regulation at least one day prior to the date of opening of the issue.

(4)     In case the promoters have to subscribe to equity shares or convertible securities towards minimum promoters? contribution, the amount of promoters? contribution shall be kept in an escrow account with a scheduled commercial bank, which shall be released to the issuer along with the release of the issue proceeds:

Provided that where the promoters? contribution has already been brought in and utilised, the issuer shall give the cash flow statement disclosing the use of such funds in the offer document; Provided further that where the minimum promoters? contribution is more than one hundred crore rupees and the initial public offer is for partly paid shares, the promoters shall bring in at least one hundred crore rupees before the date of opening of the issue and the remaining amount may be brought on a pro-rata basis before the calls are made to the public.

Explanation: For the purpose of this regulation:

(1)         Promoters? contribution shall be computed on the basis of the post-issue expanded capital:

(a)         assuming full proposed conversion of convertible securities into equity shares;

(b)         assuming exercise of all vested options, where any employee stock options are outstanding at the time of initial public offer in terms of proviso (a) to sub-regulation (2) of regulation 5.

(2)         For computation of ?weighted average price?:

(a)         ?weight? means the number of equity shares arising out of conversion of such specified securities into equity shares at various stages;

(b)         ?price? means the price of equity shares on conversion arrived at after taking into account the predetermined conversion price at various stages.

Regulation - 15. Securities ineligible for minimum promoters? contribution

(1)     For the computation of minimum promoters? contribution, the following specified securities shall not be eligible:

(a)         specified securities acquired during the preceding three years, if these are:

(i)           acquired for consideration other than cash and revaluation of assets or capitalisation of intangible assets is involved in such transaction; or

(ii)         resulting from a bonus issue by utilisation of revaluation reserves or unrealised profits of the issuer or from bonus issue against equity shares which are ineligible for minimum promoters? contribution;

(b)         specified securities acquired by the promoters and alternative investment funds or foreign venture capital investors or scheduled commercial banks or public financial institutions or insurance companies registered with Insurance Regulatory and Development Authority of India, during the preceding one year at a price lower than the price at which specified securities are being offered to the public in the initial public offer:

Provided that nothing contained in this clause shall apply:

(i)           if the promoters and alternative investment funds, as applicable, pay to the issuer the difference between the price at which the specified securities are offered in the initial public offer and the price at which the specified securities had been acquired;

(ii)         if such specified securities are acquired in terms of the scheme under sections 391 to 394 of the Companies Act, 1956 or sections 230 to 234 of the Companies Act, 2013, as approved by a High Court or a tribunal or the Central Government, as applicable, by the promoters in lieu of business and invested capital that had been in existence for a period of more than one year prior to such approval;

(iii)        to an initial public offer by a government company, statutory authority or corporation or any special purpose vehicle set up by any of them, which is engaged in the infrastructure sector;

(c)         specified securities allotted to the promoters and alternative investment funds during the preceding one year at a price less than the issue price, against funds brought in by them during that period, in case of an issuer formed by conversion of one or more partnership firms or limited liability partnerships, where the partners of the erstwhile partnership firms or limited liability partnerships are the promoters of the issuer and there is no change in the management:

Provided that specified securities, allotted to the promoters against the capital existing in such firms for a period of more than one year on a continuous basis, shall be eligible;

(d)         specified securities pledged with any creditor.

(2)     Specified securities referred to in clauses (a) and (c) of sub-regulation (1) shall be eligible? for the computation of promoters? contribution if such securities are acquired pursuant to a scheme which has been approved by a High Court under the sections 391 to 394 of the Companies Act, 1956 or approved by a tribunal or the Central Government under sections 230 to 234 of the Companies Act, 2013.

PART IV: LOCK-IN AND RESTRICTIONS ON TRANSFERABILITY

Regulation - 16. Lock-in of specified securities held by the promoters

(1)     [14][The specified securities held by the promoters shall not be transferable (hereinafter referred to as ?lock-in?) for the periods as stipulated hereunder:

(a)         minimum promoters? contribution including contribution? made by alternative investment? funds or foreign venture capital investors or scheduled commercial banks or public financial institutions or insurance companies registered with Insurance Regulatory and Development Authority of India referred to in proviso to sub-regulation (1) of regulation 14, shall be locked-in for a period of three years from the date of commencement of commercial production or date of allotment in the initial public offer, whichever is later;

(b)         promoters? holding in excess of minimum promoters? contribution shall be locked-in for a period of one year from the date of allotment in the initial public offer.

Explanation: For the purposes of this clause, the expression "date of commencement of commercial production" means the last date of the month in which commercial production of the project in respect of which the funds raised are proposed to be utilised as stated in the offer document, is expected to commence.

(2)     [15][The SR equity shares shall be under lock-in until conversion into equity shares having voting rights same as that of ordinary shares or shall be locked-in for a period specified in sub- regulations (1), whichever is later.]

Regulation - 17. Lock-in of specified securities held by persons other than the promoters

(1)     The entire pre-issue capital held by persons other than the promoters shall be locked-in for a period of one year from the date of allotment in the initial public offer:

Provided that nothing contained in this regulation shall apply to:

(a)         equity shares allotted to employees, whether currently an employee or not, under an employee stock option or employee stock purchase scheme of the issuer prior to the initial public offer, if the issuer has made full disclosures with respect to such options or scheme in accordance with Part A of Schedule VI;

(b)         equity shares held by an employee stock option trust or transferred to the employees by an employee stock option trust pursuant to exercise of options by the employees, whether currently employees or not, in accordance with the employee stock option plan or employee stock purchase scheme.

Provided that the equity shares allotted to the employees shall be subject to the provisions of lock-in as specified under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

(c)         equity shares held by a venture capital fund or alternative investment fund of category I or Category II or a foreign venture capital investor:

Provided that such equity shares shall be locked in for a period of at least one year from the date of purchase by the venture capital fund or alternative investment fund or foreign venture capital investor.

Explanation: For the purpose of clause (c), in case such equity shares have resulted pursuant to conversion of fully paid-up compulsorily convertible securities, the holding period of such convertible securities as well as that of resultant equity shares together shall be considered for the purpose of calculation of one year period and convertible securities shall be deemed to be fully paid-up, if the entire consideration payable thereon has been paid and no further consideration is payable at the time of their conversion.

Regulation - 18. Lock-in of specified securities lent to stabilising agent under the green shoe option

The lock-in provisions shall not apply with respect to the specified securities lent to stabilising agent for the purpose of green shoe option, during the period starting from the date of lending of such specified securities and ending on the date on which they are returned to the lender in terms of sub-regulation (5) or (6) of regulation 57:

Provided that the specified securities shall be locked-in for the remaining period from the date on which they are returned to the lender.

Regulation - 19. Lock-in of party-paid securities

If the specified securities which are subject to lock-in are partly paid-up and the amount called-up on such specified securities is less than the amount called-up on the specified securitiesissued to the public, the lock-in shall end only on the expiry of three years after such specified securities have become pari passu with the specified securities issued to the public.

Regulation - 20. Inscription or recording of non-transferability

The certificates of specified securities which are subject to lock-in shall contain the inscription ?non-transferable? and specify the lock-in period and in case such specified securities are dematerialised, the issuer shall ensure that the lock-in is recorded by the depository.

Regulation - 21. Pledge of locked-in specified securities

(1)     Specified securities [16][, except SR equity shares,] held by the promoters and locked-in may be pledged as a collateral security for a loan granted by a scheduled commercial bank or a public financial institution or a systemically important non-banking finance company or a housing finance company, subject to the following:

a)        if the specified securities are locked-in in terms of clause (a) of regulation 16, the loan has been granted to the issuer company or its subsidiary(ies) for the purpose of financing one or more of the objects of the issue and pledge of specified securities is one of the terms of sanction of the loan;

b)        if the specified securities are locked-in in terms of clause (b) of regulation 16 and the pledge of specified securities is one of the terms of sanction of the loan.

Provided that such lock-in shall continue pursuant to the invocation of the pledge and such transferee shall not be eligible to transfer the specified securities till the lock-in period stipulated in these regulations has expired.

Regulation - 22. Transferability of locked-in specified securities

Subject to the provisions of Securities and Exchange Board of India (Substantial Acquisition of shares and Takeovers) Regulations, 2011, the specified securities [17][, except SR equity shares,] held by the promoters and locked-in as per regulation 16, may be transferred to another promoter or any person of the promoter group or a new promoter and the specified securities held by persons other than the promoters and locked-in as per regulation 17, may be transferred to any other person holding the specified securities which are locked-in along with the securities proposed to be transferred:

Provided that the lock-in on such specified securities shall continue for the remaining period with the transferee and such transferee shall not be eligible to transfer them till the lock-in period stipulated in these regulations has expired.

PART V: APPOINTMENT OF LEAD MANAGERS, OTHER INTERMEDIARIES AND COMPLIANCE OFFICER

Regulation - 23.

(1)                    The issuer shall appoint one or more merchant bankers, which are registered with the Board, as lead manager(s) to the issue.

(2)                    Where the issue is managed by more than one lead manager, the rights, obligations and responsibilities, relating inter alia to disclosures, allotment, refund and underwriting obligations, if any, of each lead manager shall be predetermined and be disclosed in the draft offer document and the offer document as specified in Schedule I.

(3)                    At least one lead manager to the issue shall not be an associate (as defined under the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992) of the issuer and if any of the lead manager is an associate of the issuer, it shall disclose itself as an associate of the issuer and its role shall be limited to marketing of the issue.

(4)                    The issuer shall, in consultation with the lead manager(s), appoint other intermediaries which are registered with the Board after the lead manager(s) have independently assessed the capability of other intermediaries to carry out their obligations.

(5)                    The issuer shall enter into an agreement with the lead manager(s) in the format specified in Schedule II and enter into agreements with other intermediaries as required under the respective regulations applicable to the intermediary concerned:

Provided that such agreements may include such other clauses as the issuer and the intermediaries may deem fit without diminishing or limiting in any way the liabilities and obligations of the lead manager(s), other intermediaries and the issuer under the Act, the Companies Act, 2013 or the Companies Act, 1956 (to the extent applicable), the Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996 and the rules and regulations made thereunder or any statutory modification or statutory enactment thereof:

Provided further that in case of ASBA process, the issuer shall take cognisance of the deemed agreement of the issuer with the self-certified syndicate banks.

(6)                    The issuer shall, in case of an issue made through the book building process, appoint syndicate member(s) and in the case of any other issue, appoint bankers to issue, at centres in the manner specified in Schedule XII.

(7)                    The issuer shall appoint a registrar to the issue, registered with the Board, which has connectivity with all the depositories:

Provided that if the issuer itself is a registrar, it shall not appoint itself as registrar to the issue; Provided further that the lead manager shall not act as a registrar to the issue in which it is also handling the post-issue responsibilities.

(8)                    The issuer shall appoint a compliance officer who shall be responsible for monitoring the compliance of the securities laws and for redressal of investors? grievances.

PART VI: DISCLOSURES IN AND FILING OF OFFER DOCUMENTS

Regulation - 24. Disclosures in the draft offer document and offer document

(1)                    The draft offer document and offer document shall contain all material disclosures which are true and adequate to enable the applicants to take an informed investment decision.

(2)                    Without prejudice to the generality of sub-regulation (1), the red-herring prospectus, and prospectus shall contain:

(a)   disclosures specified in the Companies Act, 2013 and;

(b)   disclosures specified in Part A of Schedule VI .

(3)                    The lead manager(s) shall exercise due diligence and satisfy themselves about all aspects of the issue including the veracity and adequacy of disclosure in the draft offer document and the offer document.

(4)                    The lead manager(s) shall call upon the issuer, its promoters and its directors or in case of an offer for sale, also the selling shareholders, to fulfil their obligations as disclosed by them in the draft offer document and the offer document and as required in terms of these regulations.

(5)                    The lead manager(s) shall ensure that the information contained in the draft offer document and offer document and the particulars as per restated audited financial statements in the offer document are not more than six months old from the issue opening date.

Regulation - 25. Filing of the draft offer document and offer document

(1)     Prior to making an initial public offer, the issuer shall file three copies of the draft offer document with the concerned regional office of the Board under the jurisdiction of which the registered office of the issuer company is located, in accordance with Schedule IV, along with fees as specified in Schedule III, through the lead manager(s).

(2)     The lead manager(s) shall submit the following to the Board along with the draft offer document:

(a)                    a certificate, confirming that an agreement has been entered into between the issuer and the lead manager(s);

(b)                    a due diligence certificate as per Form A of Schedule V;

(c)                     in case of an issue of convertible debt instruments, a due diligence certificate from the debenture trustee as per Form B of Schedule V;

(3)     The issuer shall also file the draft offer document with the stock exchange(s) where the specified securities are proposed to be listed, and submit to the stock exchange(s), the Permanent Account Number, bank account number and passport number of its promoters where they are individuals, and Permanent Account Number, bank account number, company registration? number or equivalent and the address of the Registrar of Companies with which the promoter is registered, where the promoter is a body corporate.

(4)     The Board may specify changes or issue observations, if any, on the draft offer document within thirty days from the later of the following dates:

(a)      the date of receipt of the draft offer document under sub-regulation (1); or

(b)      the date of receipt of satisfactory reply from the lead manager(s), where the Board has sought any clarification or additional information from them; or

(c)      the date of receipt of clarification or information from any regulator or agency, where the Board has sought any clarification or information from such regulator or agency; or

(d)      the date of receipt of a copy of in-principle approval letter issued by the stock exchange(s).

(5)     If the Board specifies any changes or issues observations on the draft offer document, the issuer and lead manager(s) shall carry out such changes in the draft offer document and shall submit to the Board an updated draft offer document complying with the observations issued by the Board and highlighting all changes made in the draft offer document and before [18][***] filing the offer documents with the Registrar of Companies or an appropriate authority, as applicable.

(6)     If there are any changes in the draft offer document in relation to the matters specified in Schedule XVI, an updated offer document or a fresh draft offer document, as the case may be, shall be filed with the Board along with fees specified in Schedule III.

(7)     Copy of the offer documents shall also be filed with the Board and the stock exchange(s) through the lead manager(s) promptly after [19][filing] the offer documents with Registrar of Companies.

(8)     The draft offer document and the offer document shall also be furnished to the Board in a soft copy.

(9)     The lead manager(s) shall submit the following documents to the Board after issuance of observations by the Board or after expiry of the period stipulated in sub-regulation (4) of regulation 25 if the Board has not issued observations:

(a)      a statement certifying that all changes, suggestions and observations made by the Board have been incorporated in the offer document;

(b)      a due diligence certificate as per Form C of Schedule V, at the time of [20][filing] of the offer document;

(c)      a copy of the resolution passed by the board of directors of the issuer for allotting specified securities to promoter(s) towards amount received against promoters? contribution, before opening of the issue;

(d)      a certificate from a statutory auditor, before opening of the issue, certifying that promoters? contribution has been received in accordance with these regulations, accompanying therewith the names and addresses of the promoters who have contributed to the promoters? contribution and the amount paid and credited to the issuer?s bank account by each of them towards such contribution;

(e)      a due diligence certificate as per Form D of Schedule V, in the event the issuer has made a disclosure of any material development by issuing a public notice pursuant to para 4 of Schedule IX.

Regulation - 26. Draft offer document and offer document to be available to the public

(1)                    The draft offer document filed with the Board shall be made public for comments, if any, for a period of at least twenty one days from the date of filing, by hosting it on the websites of the Board, stock exchanges where specified securities are proposed to be listed and lead manager(s) associated with the issue.

(2)                    The issuer shall, within two days of filing the draft offer document with the Board, make a public announcement in one English national daily newspaper with wide circulation, one Hindi national daily newspaper with wide circulation and one regional language newspaper with wide circulation at the place where the registered office of the issuer is situated, disclosing the fact of filing of the draft offer document with the Board and inviting the public to provide their comments to the Board, the issuer or the lead manager(s) in respect of the disclosures made in the draft offer document.

(3)                    The lead manager(s) shall, after expiry of the period stipulated in sub-regulation (1), file with the Board, details of the comments received by them or the issuer from the public, on the draft offer document, during that period and the consequential changes, if any, that are required to be made in the draft offer document.

(4)                    The issuer and the lead manager(s) shall ensure that the offer documents are hosted on the websites as required under these regulations and its contents are the same as the versions as filed with the Registrar of Companies, Board and the stock exchanges, as applicable.

(5)                    The lead manager(s) and the stock exchanges shall provide copies of the offer document to the public as and when requested and may charge a reasonable sum for providing a copy of the same.

PART VII - PRICING

Regulation - 27. Face value of equity shares

The disclosure about the face value of equity shares shall be made in the draft offer document, offer document, advertisements and application forms, along with the price band or the issue price in identical font size.

Regulation - 28. Pricing

(1)     The issuer may determine the price of equity shares, and in case of convertible securities, the coupon rate and the conversion price, in consultation with the lead manager(s) or through the book building process, as the case may be.

(2)     The issuer shall undertake the book building process in the manner specified in Schedule? XIII.

Regulation - 29. Price and price band

(1)     The issuer may mention a price or a price band in the offer document (in case of a fixed price issue) and a floor price or a price band in the red herring prospectus (in case of a book built issue) and determine the price at a later date before [21][filing] the prospectus with the Registrar of Companies:

Provided that the prospectus [22][filed] with the Registrar of Companies shall contain only one price or the specific coupon rate, as the case may be.

(2)     The cap on the price band, and the coupon rate in case of convertible debt instruments, shall be less than or equal to one hundred and twenty per cent. of the floor price.

(3)     The floor price or the final price shall not be less than the face value of the specified securities.

(4)     Where the issuer opts not to make the disclosure of the floor price or price band in the red herring prospectus, the issuer shall announce the floor price or the price band at least two working days before the opening of the issue in the same newspapers in which the pre-issue advertisement was released or together with the pre-issue advertisement in the format prescribed under Part A of Schedule X.

(5)     The announcement referred to in sub-regulation (4) shall contain relevant financial ratios computed for both upper and lower end of the price band and also a statement drawing attention of the investors to the section titled ?basis of issue price? of the offer document.

(6)     The announcement referred to in sub-regulation (4) and the relevant financial ratios referred to in sub-regulation (5) shall be disclosed on the websites of the stock exchange(s) and shall also be pre-filled in the application forms to be made available on the websites of the stock exchange(s).

Regulation - 30. Differential pricing

(1)     The issuer may offer its specified securities at different prices, subject to the following:

(a)                    retail individual investors? or retail individual? shareholders? or employees entitled for reservation made under regulation 33 may be offered specified securities at a price not lower than by more than ten per cent. of the price at which net offer is made to other categories of applicants, excluding anchor investors;

(b)                    in case of a book built issue, the price of the specified securities offered to the anchor investors shall not be lower than the price offered to other applicants;

(c)                     In case the issuer opts for the alternate method of book building in terms of Part D of Schedule XIII, the issuer may offer the specified securities to its employees at a price not lower than by more than ten per cent. of the floor price.

(2)     Discount, if any, shall be expressed in rupee terms in the offer document.

PART VIII: ISSUANCE CONDITIONS AND PROCEDURE

Regulation - 31. Minimum offer to public

The minimum offer to the public shall be subject to the provisions of clause (b) of sub-rule (2) of rule 19 of Securities Contracts (Regulations) Rules, 1957.

Regulation - 32. Allocation in the net offer

(1)     In an issue made through the book building process under sub-regulation (1) of regulation 6 the allocation in the net offer category shall be as follows:

(a)         not less than thirty five per cent. to retail individual investors;

(b)         not less than fifteen per cent. to non-institutional investors;

(c)         not more than fifty per cent. to qualified institutional buyers, five per cent. of which shall be allocated to mutual funds:

Provided that the unsubscribed portion in either of the categories specified in clauses (a) or (b) may be allocated to applicants in any other category:

Provided further that in addition to five per cent. allocation available in terms of clause (c), mutual funds shall be eligible for allocation under the balance available for qualified institutional buyers.

(2)     In an issue made through the book building process under sub-regulation (2) of regulation 6, the allocation in the net offer category shall be as follows:

(a)         not more than ten per cent. to retail individual investors;

(b)         not more than fifteen per cent. to non-institutional investors;

(c)         not less than seventy five per cent. to qualified institutional buyers, five per cent. of which shall be allocated to mutual funds

Provided that the unsubscribed portion in either of the categories specified in clauses (a) or (b) may be allocated to applicants in the other category:

Provided further that in addition to five per cent. allocation available in terms of clause (c), mutual funds shall be eligible for allocation under the balance available for qualified institutional buyers.

(3)     In an issue made through the book building process, the issuer may allocate up to sixty per cent. of the portion available for allocation to qualified institutional buyers to anchor investors in accordance with the conditions specified in this regard in Schedule XIII.

(4)     In an issue made other than through the book building process, the allocation in the net offer category shall be made as follows:

i)                            minimum fifty per cent. to retail individual investors; and

ii)                         remaining to:

(i)          individual applicants other than retail individual investors; and

(ii)         other investors including corporate bodies or institutions, irrespective of the number of specified securities applied for;

Provided that the unsubscribed portion in either of the categories specified in clauses (a) or (b) may be allocated to applicants in the other category.

Explanation: For the purpose of sub-regulation (4), if the retail individual investor category is entitled to more than fifty per cent. of the issue size on a proportionate basis, the retail individual investors shall be allocated that higher percentage.

Regulation - 33. Reservation on a competitive basis

(1)     The issuer may make reservations on a competitive basis out of the issue size excluding promoters? contribution in favour of the following categories of persons:

a)       employees;

b)       shareholders (other than promoters and promoter group) of listed subsidiaries or listed promoter companies.

Provided that the issuer shall not make any reservation for the lead manager(s), registrar, syndicate member(s), their promoters, directors and employees and for the group or associate companies (as defined under the Companies Act, 2013) of the lead manager(s), registrar and syndicate member(s) and their promoters, directors and employees.

(2)     The reservations on a competitive basis shall be subject to the following conditions:

a)       the aggregate of reservations for employees shall not exceed five per cent. of the post-issue capital of the issuer and the value of allotment to any employee shall not exceed two lakhs rupees:

Provided that in the event of under-subscription in the employee reservation portion, the unsubscribed portion may be allotted on a proportionate basis, for a value in excess of two lakhs rupees, subject to the total allotment to an employee not exceeding five lakhs rupees.

b)       reservation for shareholders shall not exceed ten per cent. of the issue size;

c)       no further application for subscription in the net offer can be made by persons (except an employee and retail individual shareholder) in favour of whom reservation on a competitive basis is made;

d)       any unsubscribed portion in any reserved category may be added to any other reserved category and the unsubscribed portion, if any, after such inter-se adjustments among the reserved categories shall be added to the net offer category;

e)       in case of under-subscription in the net offer category, spill-over to the extent of under- subscription shall be permitted from the reserved category to the net offer.

(3)     An applicant in any reserved category may make an application for any number of specified securities, but not exceeding the reserved portion for that category.

Regulation - 34. Abridged prospectus

(1)     The abridged prospectus shall contain the disclosures as specified in Part E of Schedule VI and shall not contain any matter extraneous to the contents of the offer document.

(2)     Every application form distributed by the issuer or any other person in relation to an issue? shall be accompanied by a copy of the abridged prospectus.

Regulation - 35. ASBA

The issuer shall accept bids using only the ASBA facility in the manner specified by the Board.

Regulation - 36. Availability of issue material

The lead manager(s) shall ensure availability of the offer document and other issue material including application forms to stock exchanges, syndicate members, registrar to issue, registrar and share transfer agents, depository participants, stock brokers, underwriters, bankers to the issue, and self certified syndicate banks before the opening of the issue.

Regulation - 37. Prohibition on payment of incentives

Any person connected with the issue shall not offer any incentive, whether direct or indirect, in any manner, whether in cash or kind or services or otherwise to any person for making an application in the initial public offer, except for fees or commission for services rendered in relation to the issue.

Regulation - 38. Security deposit

(1)     The issuer shall, before the opening of the subscription list, deposit with the designated stock exchange, an amount calculated at the rate of one per cent. of the issue size available for subscription to the public in the manner specified by Board and/or stock exchange(s).

(2)     The amount specified in sub-regulation (1) shall be refundable or forfeitable in the manner specified by the Board.

Regulation - 39. IPO grading

The issuer may obtain grading for its initial public offer from one or more credit rating agencies registered with the Board.

Regulation - 40. Underwriting

(1)     If the issuer making an initial public offer, other than through the book building process, desires to have the issue underwritten, it shall appoint underwriters in accordance with the Securities and Exchange Board of India (Underwriters) Regulations, 1993.

(2)     If the issuer makes a public issue through the book building process,

a)        the issue shall be underwritten by lead manager(s) and syndicate member(s):

Provided that at least seventy five per cent. of the net offer proposed to be compulsorily allotted to qualified institutional buyers for the purpose of compliance of the eligibility conditions specified in sub-regulation (2) of regulation 6, cannot be underwritten.

b)        the issuer shall, prior to filing the prospectus, enter into underwriting agreement with the lead manager(s) and syndicate member(s), indicating therein the number of specified securities which they shall subscribe to at the predetermined price in the event of under- subscription in the issue.

c)        if the syndicate member(s) fail to fulfil their underwriting obligations, the lead manager(s) shall fulfil the underwriting obligations.

d)        the lead manager(s) and syndicate member(s) shall not subscribe to the issue in any manner except for fulfilling their underwriting obligations.

e)        in case of every underwritten issue, the lead manager(s) shall undertake minimum underwriting obligations as specified in the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992.

f)         where the issue is required to be underwritten, the underwriting obligations should at least to the extent of minimum subscription.

Regulation - 41. Monitoring agency

(1)     If the issue size, excluding the size of offer for sale by selling shareholders, exceeds one hundred crore rupees, the issuer shall make arrangements for the use of proceeds of the issue to be monitored by a public financial institution or by a scheduled commercial bank named in the offer document as bankers of the issuer:

Provided that nothing contained in this clause shall apply to an issue of specified securities made by a bank or public financial institution or an insurance company.

(2)     The monitoring agency shall submit its report to the issuer in the format specified in Schedule XI on a quarterly basis, till at least ninety five per cent. of the proceeds of the issue, excluding the proceeds raised for general corporate purposes, have been utilised.

(3)     The board of directors and the management of the issuer shall provide their comments on the findings of the monitoring agency as specified in Schedule XI.

(4)     The issuer shall, within forty five days from the end of each quarter, publicly disseminate the report of the monitoring agency by uploading the same on its website as well as submitting the same to the stock exchange(s) on which its equity shares are listed.

Regulation - 42. Public communications, publicity materials, advertisements and research reports

All public communication, publicity materials, advertisements and research reports shall comply with the provisions of Schedule IX.

Regulation - 43. Issue-related advertisements

(1)        Subject to the provisions of the Companies Act, 2013, the issuer shall, after [23][filing] the red herring prospectus (in case of a book built issue) or prospectus (in case of fixed price issue) with the Registrar of Companies, make a pre-issue advertisement in one English national daily newspaper with wide circulation, Hindi national daily newspaper with wide circulation and one regional language newspaper with wide circulation at the place where the registered office of the issuer is situated.

(2)        The pre-issue advertisement shall be in the format and shall contain the disclosures specified in Part A of Schedule X.

Provided that the disclosures in relation to price band or floor price and financial ratios contained therein shall only be applicable where the issuer opts to announce the price band or floor price along with the pre-issue advertisement pursuant to sub-regulation (4) of regulation 29.

(3)        The issuer may release advertisements for issue opening and issue closing, which shall be in the formats specified in Parts B and C of Schedule X.

(4)        During the period the issue is open for subscription, no advertisement shall be released giving an impression that the issue has been fully subscribed or oversubscribed or indicating investors? response to the issue.

Regulation - 44. Opening of the issue

(1)     Subject to the compliance with the provisions of the Companies Act, 2013, a public issue may be opened within twelve months from the date of issuance of the observations by the Board under regulation 25;

(2)     An issue shall be opened after at least three working days from the date of [24][filing], the red herring prospectus, in case of a book built issue and the prospectus, in case of a fixed price issue, with the Registrar of Companies.

Regulation ? 45. Minimum subscription

(1)     The minimum subscription to be received in the issue shall be at least ninety per cent. of the offer through the offer document, except in case of an offer for sale of specified securities: Provided that the minimum subscription to be received shall be subject to the allotment of minimum number of specified securities, as prescribed under the Securities Contracts (Regulation) Rules, 1957.

(2)     In the event of non-receipt of minimum subscription referred to in sub-regulation (1), all application monies received shall be refunded to the applicants forthwith, but not later than fifteen days from the closure of the issue.

Regulation - 46. Period of subscription

(1)         Except as otherwise provided in these regulations, an initial public offer shall be kept open for at least three working days and not more than ten working days.

(2)         In case of a revision in the price band, the issuer shall extend the bidding (issue) period disclosed in the red herring prospectus, for a minimum period of three working days, subject to the provisions of sub-regulation (1).

(3)         In case of force majeure, banking strike or similar circumstances, the issuer may, for reasons to be recorded in writing, extend the bidding (issue) period disclosed in the red herring prospectus (in case of a book built issue) or the issue period disclosed in the prospectus (in case of a fixed price issue), for a minimum period of three working days, subject to the provisions of sub-regulation (1).

Regulation - 47. Application and minimum application value

(1)     A person shall not make an application in the net offer category for a number of specified securities that exceeds the total number of specified securities offered to the public.

Provided that the maximum application by non-institutional investors shall not exceed total number of specified securities offered in the issue less total number of specified securities offered in the issue to qualified institutional buyers.

(2)     The issuer shall stipulate in the offer document the minimum application size in terms of number of specified securities which shall fall within the range of minimum application value of ten thousand rupees to fifteen thousand rupees.

(3)     The issuer shall invite applications in multiples of the minimum application value, an illustration whereof is given in Part B of Schedule XIV.

(4)     The minimum sum payable on application per specified security shall be at least twenty five per cent. of the issue price:

Provided that in case of an offer for sale, the full issue price for each specified security shall be payable at the time of application.

Explanation: For the purpose of this regulation, ?minimum application value? shall be with reference to the issue price of the specified securities and not with reference to the amount payable on application.

Regulation - 48. Manner of calls

If the issuer proposes to receive subscription monies in calls, it shall ensure that the outstanding subscription money is called within twelve months from the date of allotment in the issue and if any applicant fails to pay the call money within the said twelve months, the equity shares on which there are calls in arrears along with the subscription money already paid on such shares shall be forfeited: Provided that it shall not be necessary to call the outstanding subscription money within twelve months, if the issuer has appointed a monitoring agency in terms of regulation 41.

Regulation - 49. Allotment procedure and basis of allotment

(1)   The issuer shall not make an allotment pursuant to a public issue if the number of prospective allottees is less than one thousand.

(2)   The issuer shall not make any allotment in excess of the specified securities offered through the offer document except in case of oversubscription for the purpose of rounding off to make allotment, in consultation with the designated stock exchange.

Provided that in case of oversubscription, an allotment of not more than one per cent. of the net offer to public may be made for the purpose of making allotment in minimum lots.

(3)   The allotment of specified securities to applicants other than to the retail individual investors and anchor investors shall be on a proportionate basis within the respective investor categories? and the number of securities allotted shall be rounded off to the nearest integer, subject to minimum allotment being equal to the minimum application size as determined and disclosed in the offer document:

Provided that the value of specified securities allotted to any person, except in case of employees, in pursuance of reservation made under clause (a) of sub-regulation (1) or clause (a) of sub- regulation (2) of regulation 33, shall not exceed two lakhs rupees for retail investors or up to five lakhs rupees for eligible employees.

(4)   The allotment of specified securities to each retail individual investor shall not be less than the minimum bid lot, subject to the availability of shares in retail individual investor category, and the remaining available shares, if any, shall be allotted on a proportionate basis.

(5)   The authorised employees of the designated stock exchange, along with the lead manager(s) and registrars to the issue, shall ensure that the basis of allotment is finalised in a fair and proper manner in accordance with the procedure as specified in Part A of Schedule XIV.

Regulation - 50. Allotment, refund and payment of interest

(1)         The issuer and lead manager(s) shall ensure that the specified securities are allotted and/or application monies are refunded or unblocked within such period as may be specified by the Board.

(2)         The lead manager(s) shall ensure that the allotment, credit of dematerialised securities and refund or unblocking of application monies, as may be applicable, are done electronically.

(3)         Where the specified securities are not allotted and/or application monies are not refunded or unblocked within the period stipulated in sub-regulation (1) above, the issuer shall undertake to pay interest at the rate of fifteen per cent. per annum to the investors and within such time as disclosed in the offer document and the lead manager(s) shall ensure the same.

Regulation - 51. Post-issue advertisements

(1)     The lead manager(s) shall ensure that an advertisement giving details relating to subscription, basis of allotment, number, value and percentage of all applications including ASBA, number, value and percentage of successful allottees for all applications including ASBA, date of completion of despatch of refund orders, as applicable, or instructions to self-certified syndicate banks by the registrar, date of credit of specified securities and date of filing of listing application, etc. is released within ten days from the date of completion of the various activities in at least one English national daily newspaper with wide circulation, one Hindi national daily newspaper with wide circulation and one regional language daily newspaper with wide circulation at the place where registered office of the issuer is situated.

(2)     Details specified in sub regulation (1) shall also be placed on the websites of the stock exchange(s).

Regulation ? 52. Post-issue responsibilities of the lead manager(s)

(1)        The responsibility of the lead manager(s) shall continue until completion of the issue process and for any issue related matter thereafter.

(2)        The lead manager(s) shall regularly monitor redressal of investor grievances arising from any issue related activities.

(3)        The lead manager(s) shall continue to be responsible for post-issue activities till the applicants have received the securities certificates, credit to their demat account or refund of application monies and the listing agreement is entered into by the issuer with the stock exchange and listing or trading permission is obtained.

(4)        The lead manager(s) shall be responsible for and co-ordinate with the registrars to the issue and with various intermediaries at regular intervals after the closure of the issue to monitor the flow of applications from syndicate member(s) or collecting bank branches and/ or self-certified syndicate banks, processing of the applications including application form for ASBA and other matters till the basis of allotment is finalised, credit of the specified securities to the demat accounts of the allottees and unblocking of ASBA accounts/ despatch of refund orders are completed and securities are listed, as applicable.

(5)        Any act of omission or commission on the part of any of the intermediaries noticed by the lead manager(s) shall be duly reported by them to the Board.

(6)        In case there is a devolvement on the underwriters, the lead manager(s) shall ensure that the notice for devolvement containing the obligation of the underwriters is issued within ten days from the date of closure of the issue.

(7)        In the case of undersubscribed issues that are underwritten, the lead manager(s) shall furnish information in respect of underwriters who have failed to meet their underwriting devolvement to the Board, in the format specified in Schedule XVIII.

Regulation - 53. Release of subscription money

(1)         The lead manager(s) shall confirm to the bankers to the issue by way of copies of listing and trading approvals that all formalities in connection with the issue have been completed and that the banker is free to release the money to the issuer or release the money for refund in case of failure of the issue.

(2)         In case the issuer fails to obtain listing or trading permission from the stock exchanges where the specified securities were to be listed, it shall refund through verifiable means the entire monies received within seven days of receipt of intimation from stock exchanges rejecting the application for listing of specified securities, and if any such money is not repaid within eight days after the issuer becomes liable to repay it, the issuer and every director of the company who is an officer in default shall, on and from the expiry of the eighth day, be jointly and severally liable to repay that money with interest at the rate of fifteen per cent. per annum.

(3)         The lead manager(s) shall ensure that the monies received in respect of the issue are released to the issuer in compliance with the provisions of Section 40 (3) of the Companies Act, 2013, as applicable.

Regulation - 54. Reporting of transactions of the promoters and promoter group

The issuer shall ensure that all transactions in securities by the promoter and promoter group between the date of filing of the draft offer document or offer document, as the case may be, and the date of closure of the issue shall be reported to the stock exchange(s), within twenty four hours of such transactions.

Regulation - 55. Post-issue reports

The lead manager(s) shall submit a final post-issue report as specified in Part A of Schedule XVII, along with a due diligence certificate as per the format specified in Form F of Schedule V, within seven days of the date of finalization of basis of allotment or within seven days of refund? of money in case of failure of issue.

PART IX: MISCELLANEOUS

Regulation - 56. Restriction on further capital issues

An issuer shall not make any further issue of specified securities in any manner whether by way of public issue, rights issue, preferential issue, qualified institutions placement, issue of bonus shares or otherwise, except pursuant to an employee stock option scheme, during the period between the date of filing the draft offer document and the listing of the specified securities offered through the offer document or refund of application monies, unless full disclosures regarding the total number of specified securities or amount proposed to be raised from such further issue are made in such draft offer document or offer document, as the case may be.

Regulation - 57.Price stabilisation through green shoe option

(1)     An issuer may provide a green shoe option for stabilising the post listing price of its specified securities, subject to the following:

a)        the issuer has been authorized, by a resolution passed in the general meeting of shareholders approving the public issue, to allot specified securities to the stabilising agent, if required, on the expiry of the stabilisation period;

b)        the issuer has appointed a lead manager as a stabilising agent, who shall be responsible for the price stabilisation process;

c)        prior to filing the draft offer document, the issuer and the stabilising agent have entered into an agreement, stating all the terms and conditions relating to the green shoe option including fees charged and expenses to be incurred by the stabilising agent for discharging its responsibilities;

d)        prior to filing the offer document, the stabilising agent has entered into an agreement with the promoters or pre-issue shareholders or both for borrowing specified securities from them in accordance with clause (g) of this sub-regulation, specifying therein the maximum number of specified securities that may be borrowed for the purpose of allotment or allocation of specified securities in excess of the issue size (hereinafter referred to as the ?over- allotment?), which shall not be in excess of fifteen per cent. of the issue size;

e)        subject to clause (d), the lead manager, in consultation with the stabilising agent, shall determine the amount of specified securities to be over-allotted in the public issue;

f)         the draft offer document and offer document shall contain all material disclosures about the green shoe option specified in this regard in Part A of Schedule VI;

g)        in case of an initial public offer pre-issue shareholders and promoters and in case of a further public offer pre-issue shareholders holding more than five per cent. specified securities and promoters, may lend specified securities to the extent of the proposed over-allotment;

h)        the specified securities borrowed shall be in dematerialised form and allocation of these securities shall be made pro-rata to all successful applicants.

(2)     For the purpose of stabilisation of post-listing price of the specified securities, the stabilising agent shall determine the relevant aspects including the timing of buying such securities, quantity to be bought and the price at which such securities are to be bought from the market.

(3)     The stabilisation process shall be available for a period not exceeding thirty days from the date on which trading permission is given by the stock exchanges in respect of the specified securities allotted in the public issue.

(4)     The stabilising agent shall open a special account, distinct from the issue account, with a bank for crediting the monies received from the applicants against the over-allotment and a special account with a depository participant for crediting specified securities to be bought from the market during the stabilisation period out of the monies credited in the special bank account.

(5)     The specified securities bought from the market and credited in the special account with the depository participant shall be returned to the promoters or pre-issue shareholders immediately, in any case not later than two working days after the end of the stabilization period.

(6)     On expiry of the stabilisation period, if the stabilising agent has not been able to buy specified securities from the market to the extent of such securities over-allotted, the issuer shall allot specified securities at issue price in dematerialised form to the extent of the shortfall to the special account with the depository participant, within five days of the closure of the stabilisation period and such specified securities shall be returned to the promoters or pre-issue shareholders by the stabilising agent in lieu of the specified securities borrowed from them and the account with the depository participant shall be closed thereafter.

(7)     The issuer shall make a listing application in respect of the further specified securities allotted under sub-regulation (6), to all the stock exchanges where the specified securities allotted in the public issue are listed and the provisions of Chapter VII shall not be applicable to such allotment.

(8)     The stabilising agent shall remit the monies with respect to the specified securities allotted under sub-regulation (6) to the issuer from the special bank account.

(9)     Any monies left in the special bank account after remittance of monies to the issuer under sub- regulation (8) and deduction of expenses incurred by the stabilising agent for the stabilisation process shall be transferred to the Investor Protection and Education Fund established by the Board and the special bank account shall be closed soon thereafter.

(10)   The stabilising agent shall submit a report to the stock exchange on a daily basis during the stabilisation period and a final report to the Board in the format specified in Schedule XV.

(11)   The stabilising agent shall maintain a register for a period of at least three years from the date of the end of the stabilisation period and such register shall contain the following particulars:

(a)   The names of the promoters or pre-issue shareholders from whom the specified securities were borrowed and the number of specified securities borrowed from each of them;

(b)   The price, date and time in respect of each transaction effected in the course of the stabilisation process; and

(c)   The details of allotment made by the issuer on expiry of the stabilisation process.

Regulation - 58. Alteration of rights of holders of specified securities

The issuer shall not alter the terms including the terms of issue of specified securities which may adversely affect the interests of the holders of that specified securities, except with the consent in writing of the holders of not less than three-fourths of the specified securities of that class or with the sanction of a special resolution passed at a meeting of the holders of the specified securities of that class.

Regulation - 59. Post-listing exit opportunity for dissenting shareholders

The promoters, or shareholders in control of an issuer, shall provide an exit offer to dissenting shareholders as provided for in the Companies Act, 2013, in case of change in objects or variation in the terms of contract related to objects referred to in the offer document as per conditions and manner is provided in Schedule XX;

Provided that the exit offer shall not apply where there are neither any identifiable promoters nor any shareholders in control of the issuer.

CHAPTER III - RIGHTS ISSUE

PART I: ELIGIBILITYREQUIREMENTS

Regulation - 60. Reference date

Unless otherwise provided in this Chapter, an issuer offering specified securities of aggregate value of [25][fifty crores] rupees or more, through a rights issue shall satisfy the conditions of this Chapter at the time of filing the draft letter of offer with the Board and also at the time of filing the final letter of offer with the stock exchanges, as the case may be.

Regulation ? 61. Entities not eligible to make a rights issue

An issuer shall not be eligible to make a rights issue of specified securities:

a)        if the issuer, any of its promoters, promoter group or directors of the issuer are debarred from accessing the capital market by the Board;

b)        if any of the promoters or directors of the issuer is a promoter or director of any other company which is debarred from accessing the capital market by the Board.

c)        if any of its promoters or directors is a fugitive economic offender.

Explanation: The restrictions under (a) and (b) above will not apply to the [26][persons or entities mentioned therein] who were debarred in the past by the Board and the period of debarment is already over as on the date of filing of the draft letter of offer with the Board.

Regulation ? 62. General conditions

(1)     The issuer making a rights issue of specified securities shall ensure that:

(a)         it has made an application to one or more stock exchanges to seek an in-principle approval for listing of its specified securities on such stock exchanges and has chosen one of them as the designated stock exchange, in terms of Schedule XIX.

(b)        all its existing partly paid-up equity shares have either been fully paid-up or have been forfeited;

(c)         it has made firm arrangements of finance through verifiable means towards seventy five per cent. of the stated means of finance for the specific project proposed to be funded from issue proceeds, excluding the amount to be raised through the proposed rights issue or through existing identifiable internal accruals.

[27][Explanation - For the purpose of this regulation ?finance for the specific project? shall mean finance of capital expenditures only.]

(2)     The amount for general corporate purposes, as mentioned in objects of the issue in the draft letter of offer and the letter of offer, shall not exceed twenty five per cent. of the amount raised by the issuer.

(3)     Where the issuer or any of its promoters or directors is a wilful defaulter, the promoters or promoter group of the issuer shall not renounce their rights except to the extent of renunciation within the promoter group.

(4)     [28][Where the issuer has issued SR equity shares to its promoters or founders, then such a SR shareholder shall not renounce their rights and the SR shares received in a rights issue shall remain under lock-in until conversion into equity shares having voting rights same as that of ordinary equity shares along with existing SR equity shares.]

PART II: ISSUE OF CONVERTIBLE DEBT INSTRUMENTS AND WARRANTS

Regulation - 63. Additional requirements for issue of convertible debt instruments

(1)     In addition to other requirements laid down in these regulations, an issuer making a rights issue of convertible debt instruments shall also comply with the following conditions:

a)            it has obtained credit rating from at least one credit rating agency;