SEBI, by its Circular dated January 22, 2020, has amended the SEBI LODR and the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 with the objective of streamlining the rights issue process, applicable for all rights issues and fast track rights issues where the letter of offer is filed with the stock exchanges on or after February 14, 2020. Some of the key changes are:

i.     Reduction of the mandatory period of advance notice to stock exchanges for a rights issue from seven working days to three working days (excluding the date of intimation and record date);

ii.    Issuance of newspaper advertisement disclosing date of completion of dispatch and intimation of the same to the stock exchanges is now required to be completed by the issuer at least two days (instead of three days) before the date of opening of the issue;

iii.  Concept of dematerialized rights entitlements has been introduced, with stipulation of provisions regarding process of credit of rights entitlements, trading and settlement of dematerialized rights entitlements on the stock exchange platform, renunciation, etc;

iv.    Payment towards application for a rights issue should now be made only through the Application Supported by Blocked Amount facility; and

v.     No withdrawal of application will be permitted by any shareholder after the issue closing date.