Outcome of SEBI Board Meeting Held on December 28, 2021

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Dec 31, 2021

Outcome of SEBI Board Meeting Held on December 28, 2021

SEBI in its board meeting on December 28, 2021 took the following decisions, amongst others, for the purposes of amending the ICDR Regulations. These amendments will be applicable to Draft Red Herring Prospectuses (‘DRHPs’) filed on or after notification in the Official Gazette:

i. Objects: Where the proceeds of a public issue are to be utilised for future acquisitions / investments without identifying specific targets, SEBI has approved: (a) a limit of up to 25% of the fresh issue size towards such acquisitions / investments; and (b) an overall limit of up to 35% of the fresh issue size towards for deployment of the issue proceeds towards such acquisitions / investments and general corporate purposes;

ii. Offer for sale where DRHPs are filed under Regulation 6(2) of the ICDR Regulations: Shares offered for sale by shareholders, individually or with persons acting in concert: (a) holding more than 20% of the pre-issue shareholding of the issuer, will not exceed 50% of their pre-issue shareholding; and (b) holding less than 20% of the pre-issue shareholding of the issuer, will not exceed more than 10% of the pre-issue shareholding of the issuer;

iii. Price band: In case of book-built issues, a minimum price band of at least 105% of the floor price will be applicable;

iv. Lock-in for anchor investors: The existing lock-in period of 30 days will continue for 50% of the portion allocated to anchor investors, and for the remaining portion, a lock-in of 90 days will be applicable for all issues opening on or after April 1, 2022; and

v. Revised allocation methodology for Non Institutional Investors (‘NIIs’): For book built issues opening on or after April 1, 2022, the revised allocation in the NII category will be as follows: (a) 1/3^rd of the portion available to NIIs will be reserved for applicants with an application size of more than Rs 200,000 (approx. US$ 2,678) and up to Rs 1,000,000 (approx. US$ 13,392); and (b) 2/3^rd of the portion available to NIIs will be reserved for applicants with application size of more than Rs 1,000,000 (approx. US$ 13,392).

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