Relaxations from certain provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 in respect of Rights Issue

Last updated: 22 April 2020

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The Securities and Exchange Board of India (SEBI) has introduced temporary relaxations to certain provisions of the ICDR Regulations concerning Rights Issues. These changes, prompted by the Covid-19 pandemic, aim to ease fundraising for companies. Key adjustments include modified eligibility criteria for Fast Track Rights Issues, a reduced minimum subscription threshold to 75%, and an increased threshold for not needing to file a draft letter of offer with SEBI. These relaxations are applicable to Rights Issues opening on or before March 31, 2020.

Securities and Exchange Board of India CIRCULAR SEBI/HO/CFD/CIR/CFD/DIL/67/2020 April 21, 2020 To All Recognized Stock ExchangesAll Registered Merchant Bankers Dear Sir/Madam, Sub: Relaxations from certain provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 in respect of Rights Issue. 1. In the wake of developments relating to the Covid-19 pandemic, a number of suggestions have been received by SEBI from industry bodies and mark

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FAQ :

SEBI has introduced these relaxations in response to the Covid-19 pandemic and suggestions from industry bodies and market participants to ease conditions for raising funds from the securities market.

Temporary relaxations include changes to the time periods mentioned in Regulation 99 (e.g., 'three years' becomes 'eighteen months'), adjustments to monetary thresholds (e.g., 'two hundred and fifty crores' becomes 'one hundred crores'), and updated conditions regarding show-cause notices and settlement terms.

Yes, the minimum subscription requirement has been relaxed to at least seventy-five per cent of the offer. If subscribed between 75% and 90%, the issue is considered successful if at least 75% of the issue size is utilised for objects other than general corporate purposes.

The threshold for not filing a draft letter of offer with SEBI has been increased from 'ten crores' to 'twenty-five crores'.

No, these relaxations are applicable for Rights Issues that open on or before March 31, 2020, and are not applicable for the issuance of warrants.

Notification No : SEBI/HO/CFD/CIR/CFD/DIL/67/2020
Source : https://www.sebi.gov.in/legal/circulars/apr-2020/relaxations-from-certain-provisions-of-the-sebi-issue-of-capital-and-disclosure-requirements-regulations-2018-in-respect-of-rights-issue_46537.html

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