Chapter 14 - GUIDELINES FOR OTCEI ISSUES - SEBI (Disclosure and Investor Protection Guidelines) 2000

CHAPTER XIV GUIDELINES FOR OTCEI ISSUES 14.0 Any company making an initial public offer of equity share or any other security convertible at a later date into equity shares and proposing to list them on the Over The Counter Exchange of India (OTCEI) shall comply with all the requirements specified in these guidelines: 14.1 Eligibility norms 14.1.1 Any company making an initial public offer of equity share or any other security convertible at a later date into equity shares and proposing to list them on the OTCEI, is exempted from the eligibility norms specified in Clause 2.2 of Chapter II of these guidelines subject to its fulfilling the following besides the listing criteria laid down by the OTCEI: i. it is sponsored by a member of the OTCEI and; ii. has appointed at least two market makers (one compulsory and one additional market maker). 14.1.2 Any offer for sale of equity share or any other security convertible at a later date into equity shares resulting out of a Bought out Deal (BOD) registered with the OTCEI is exempted from the eligibility norms specified in Clause 2.2 of Chapter II of these guidelines subject to the fulfillment of the listing criteria laid down by the OTCEI. Provided that the issuer company which has made issue of capital under Clause 14.1.1 14.1.2 above, shall not delist its securities from OTCEI for a minimum period of three years from the date of admission to dealing of such securities on OTCEI.. 14.2 Pricing Norms 14.2.1 Any offer for sale of equity share or any other security convertible at a later date into equity shares resulting out of a Bought out Deal (BOD) registered with OTCEI is exempted from the pricing norms specified in Clause 3.2 of Chapter III of these guidelines subject to the following conditions: i) The promoters after such issue shall retain at least 20% of the total issued capital with the lock-in of three years from the date of the allotment of securities in the proposed issue; and ii) At least two market makers (One Compulsory and one additional market maker) are appointed in accordance with the Market Making guidelines stipulated by the OTCEI. 14.3 Projections 14.3.1 In case of securities proposed to be listed on OTCEI, for the purpose of Clause (6.12.1) of Chapter VI of these guidelines, projections based on the appraisal done by the sponsor who undertakes to do market making activity in the securities offered in the proposed issue can be included in the offer document subject to compliance with other conditions contained in the said clause.