Regulation 164 - Pricing of frequently traded shares - Securities and Exchange Board of India (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2018

PART IV: PRICING Pricing of frequently traded shares 164. (1) If the equity shares of the issuer have been listed on a recognised stock exchange for a period of 1 [ 90 trading days ] or more as on the relevant date, the price of the equity shares to be allotted pursuant to the preferential issue shall be not less than higher of the following: a. the 2 [ 90 trading days ] volume weighted average price of the related equity shares quoted on the recognised stock exchange 3 [ **** ] preceding the relevant date; or b. the 4 [ 10 trading days ] volume weighted average prices of the related equity shares quoted on a recognised stock exchange 5 [ **** ] preceding the relevant date. 6 [ Provided that if the Articles of Association of the issuer provide for a method of determination which results in a floor price higher than that determined under these regulations, then the same shall be considered as the floor price for equity shares to be allotted pursuant to the preferential issue. ] (2) If the equity shares of the issuer have been listed on a recognised stock exchange for a period of less than 7 [ 90 trading days ] as on the relevant date, the price of the equity shares to be allotted pursuant to the preferential issue shall be not less than the higher of the following: a) the price at which equity shares were issued by the issuer in its initial public offer or the value per share arrived at in a scheme of compromise, arrangement and amalgamation under 8 [ **** ] sections 230 to 234 the Companies Act, 2013, as applicable, pursuant to which the equity shares of the issuer were listed, as the case may be; or b) the average of the 9 [ **** ] volume weighted average prices of the related equity shares quoted on the recognised stock exchange during the period the equity shares have been listed preceding the relevant date; or c) the average of the 10 [ 10 trading days ] volume weighted average prices of the related equity shares quoted on a recognised stock exchange during the two weeks preceding the relevant date. 11 [ Provided that if the Articles of Association of the issuer provide for a method of determination which results in a floor price higher than that determined under these regulations, then the same shall be considered as the floor price for equity shares to be allotted pursuant to the preferential issue. ] (3) Where the price of the equity shares is determined in terms of sub-regulation (2), such price shall be recomputed by the issuer on completion of 12 [ 90 trading days ] from the date of listing on a recognised stock exchange with reference to the 13 [ 90 trading days ] volume weighted average prices of the related equity shares quoted on the recognised stock exchange during these 14 [ 90 trading days ] and if such recomputed price is higher than the price paid on allotment, the difference shall be paid by the allottees to the issuer. 15 [ Provided that if the Articles of Association of the issuer provide for a method of determination which results in a floor price higher than that determined under these regulations, then the same shall be considered as the floor price for equity shares to be allotted pursuant to the preferential issue. ] (4) 16 [ (a) ] A preferential issue of specified securities to qualified institutional buyers, not exceeding five in number, shall be made at a price not less than the 17 [ 10 trading days ] volume weighted average prices of the related equity shares quoted on a recognised stock exchange 18 [ **** ] preceding the relevant date. 19 [ Provided that if the Articles of Association of the issuer provide for a method of determination which results in a floor price higher than that determined under these regulations, then the same shall be considered as the floor price for equity shares to be allotted pursuant to the preferential issue: ] 20 [ (b) no allotment shall be made, either directly or indirectly, to any qualified institutional buyer who is a promoter or any person related to the promoters of the issuer: Provided that a qualified institutional buyer who does not hold any shares in the issuer and who has acquired rights in the capacity of a lender shall not be deemed to be a person related to the promoters. Explanation. - For the purpose of this clause, a qualified institutional buyer who has any of the following rights shall be deemed to be a person related to the promoters of the issuer:- (a) rights under a shareholders agreement or voting agreement entered into with promoters or promoter group; (b) veto rights; or (c) right to appoint any nominee director on the board of the issuer. ] (5) For the purpose of this Chapter, frequently traded shares means the shares of the issuer, in which the traded turnover on any recognised stock exchange during the 21 [ 240 trading days ] preceding the relevant date, is at least ten per cent of the total number of shares of such class of shares of the issuer: Provided that where the share capital of a particular class of shares of the issuer is not identical throughout such period, the weighted average number of total shares of such class of the issuer shall represent the total number of shares. Explanation: For the purpose of this regulation, stock exchange means any of the recognised stock exchange(s) in which the equity shares of the issuer are listed and in which the highest trading volume in respect of the equity shares of the issuer has been recorded during the preceding 22 [ 90 trading days ] prior to the relevant date. ************ NOTES:- 1. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as twenty six weeks 2. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as average of the weekly high and low of the 3. Omitted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as during the twenty six weeks 4. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as average of the weekly high and low of the 5. Omitted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as during the two weeks 6. Inserted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 7. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as twenty six weeks 8. Omitted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as sections 391 to 394 of the Companies Act, 1956 or 9. Omitted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as weekly high and low of the 10. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as weekly high and low of the 11. Inserted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 12. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as twenty six weeks 13. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as average of the weekly high and low of the 14. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as twenty six weeks 15. Inserted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 16. Numbered vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 17. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as average of the weekly high and low of the 18. Omitted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as during the two weeks 19. Inserted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 20. Inserted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 21. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as twelve calendar months 22. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as twenty six weeks