One-timerelaxation with respect to validity of SEBI Observations

Last updated: 22 April 2020

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The Securities and Exchange Board of India (SEBI) has introduced a one-time relaxation for public and rights issues in response to the COVID-19 pandemic. SEBI Observations that expired or will expire between March 1, 2020, and September 30, 2020, have had their validity extended by six months. Additionally, issuers can now adjust their fresh issue size by up to 50% without needing to refile the draft offer document, provided certain conditions are met.

Securities and Exchange Broad of India

CIRCULAR

SEBI/HO/CFD/CIR/DIL/CIR/P/2020/66

April 21, 2020

To
All Registered Merchant Bankers
All Recognized Stock Exchanges
All entities who propose to list specified securities

Dear Sir/Madam,

Sub: One-time relaxation with respect to validity of SEBI Observations.

1. In view of the impact of the COVID-19 pandemic, based on representations from various industry bodies, SEBI has decided to grant the following one time relaxations:

(i) In terms of Regulation 44(1), 85 and 140 of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations), a public issue/rights issue may be opened within twelve months from the date of issuance of observations by SEBI.

The validity of the SEBI Observations where the same have expired/ will expire between March 1, 2020 and September 30, 2020 has been extended by 6 months, from the date of expiry of such observation, subject to an undertaking from lead manager of the issue confirming compliance with Schedule XVI of the ICDR Regulations while submitting the updated offer document to the Board.

(ii) In terms of Schedule XVI (1) (f)(i) of the ICDR Regulations, 2018 any increase or decrease in estimated fresh issue size by more than twenty percent of the estimated fresh issue size shall require fresh filing of the draft offer document along with fees.

An issuer shall be permitted to increase or decrease the fresh issue size by up to 50% of the estimated issue size without requiring to file fresh draft offer document with the Board subject to following conditions:

(a) there has been no change in the objects of the issue

(b) the lead manager undertakes that the draft offer document is in compliance with provisions of Regulation 7(1)(e)

(c) the lead manager shall ensure that all appropriate changes are made to the relevant section of DRHP and an addendum, in this regard, shall be made public.

The above relaxation on change in fresh issue size shall be applicable for issues (IPO/ Rights Issues/ FPO) opening before December 31, 2020.

2. This circular shall come into force with immediate effect.

3. This circular is issued in exercise of powers conferred by Section 11(1) of the Securities and Exchange Board of India Act, 1992.

4. A copy of this circular is available on SEBI website at www.sebi.gov.in under the categories “Legal Framework/ Circulars”.

Yours faithfully,

Jeevan Sonparote
Chief General Manager
Corporation Finance Department
+91-22-26449110
jeevans@sebi.gov.in

FAQ :

The circular provides a one-time relaxation regarding the validity of SEBI Observations for public and rights issues due to the impact of the COVID-19 pandemic.

The validity of SEBI Observations that expired or will expire between March 1, 2020, and September 30, 2020, has been extended by six months from the original expiry date.

Yes, issuers are permitted to increase or decrease their fresh issue size by up to 50% of the estimated issue size without needing to file a fresh draft offer document, subject to specific conditions.

The conditions include no change in the objects of the issue, an undertaking from the lead manager on compliance, and ensuring all appropriate changes are made to the DRHP with a public addendum.

This relaxation on the change in fresh issue size is applicable for issues (IPO, Rights Issues, FPO) opening before December 31, 2020.