TMI BlogBOOK BUILDING PROCESS [See regulation 28(2), 30(1)(c), 32(2), 126(2), 128(1)(d), 129(3), 188(2), 190(1)(b), 250(2), 252(1)(c) and 291(4)]X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) Underwriting (a) The lead manager(s) shall compulsorily underwrite the issue and the syndicate member(s) shall sub-underwrite with the lead manager(s). (b) The lead manager(s) / syndicate member(s) shall enter into underwriting/ sub underwriting agreement on a date prior to filing of the prospectus 10 [ or the red herring prospectus, as the case may be ] . (c) The details of the final underwriting arrangement indicating actual numbers of shares underwritten shall be disclosed and printed in the prospectus 11 [ or the red herring prospectus, as the case may be ] before it is 3 [ filed ] with the Registrar of Companies. (d) In case of an under-subscription in an issue, the shortfall shall be made good by the lead manager(s) and the same shall be incorporated in the inter-se allocation of responsibility as specified in Schedule I. (4) Agreement with the stock exchanges (a) The issuer shall enter into an agreement with one or more stock exchange(s) which have the facility of book building through the electronic bidding system. (b) The agreement shall specify inter-alia, the rights, duties, responsibilities and obligations of the issuer and the stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g prospectus: (i) a statement that the floor price or price band, as the case may be, shall be disclosed at least two working days (in case of an initial public offer) and at least one working day (in case of a further public offer) before the opening of the issue; (ii) a statement that the investors may be guided by the secondary market prices (in case of a further public offer); (iii) names and editions of the newspapers where the announcement of the floor price or price band would be made; (iv) website addresses where the announcement is available. (b) where the issuer decides to opts for a price band instead of a floor price, the issuer shall also ensure compliance with the following conditions: (i) The cap of the price band should not be higher by more than 20 per cent. of the floor of the band; i.e. cap of the price band shall be less than or equal to 120 per cent. of the floor of the price band; 5 [ Provided that the cap of the price band shall be at least one hundred and five per cent of the floor price. ] (ii) The price band can be revised during the bidding period, provided the maximum revision on either side shall not exceed 20 per cent. i.e. f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up to ten crore rupees (ii) minimum of 2 and maximum of 15 such investors shall be permitted for allocation above ten crore rupees and up to two fifty crore rupees, subject to minimum allotment of five crore rupees per such investor; (i) in case of allocation above two fifty crore rupees; a minimum of 5 such investors and a maximum of 15 such investors for allocation up to two fifty crore rupees and an additional 10 such investors for every additional two fifty crore rupees or part thereof, shall be permitted, subject to a minimum allotment of five crore rupees per such investor. (II) In case of public issue on the SME exchange, through the book building process: (i) maximum of 2 such investors shall be permitted for allocation up to two crore rupees (ii) minimum of 2 and maximum of 15 such investors shall be permitted for allocation above two crore rupees and up to twenty five crore rupees, subject to minimum allotment of one crore rupees per such investor; (iii) in case of allocation above twenty five crore rupees; a minimum of 5 such investors and a maximum of 15 such investors for allocation up to twenty five crore rupees and an additional 10 such investors f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... category. Explanation : For the purpose of clause (k) above, a qualified institutional buyer who has any of the following rights shall be deemed to be a person related to the promoters or promoter group of the issuer: (I) rights under a shareholders agreement or voting agreement entered into with promoters or promoter group of the issuer; (II) veto rights; or (III) right to appoint any nominee director on the board of the issuer. Further, for the purposes of this regulation, an anchor investor shall be deemed to be an associate of the lead manager if: (i) either of them controls, directly or indirectly through its subsidiary or holding company, not less than fifteen per cent. of the voting rights in the other; or (ii) either of them, directly or indirectly, by itself or in combination with other persons, exercises control over the other; or (iii) there is a common director, excluding nominee director, amongst the anchor investor and the lead manager. l) Applications made by a qualified institutional buyer under the anchor investor category and under the non anchor Investor category shall not be considered as multiple applications. (11) Margin money (a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue. (n) The names of the qualified institutional buyers making the bids shall not be made public. (o) The retail individual investors may bid at the cut off price instead of a specific bid price. (p) The stock exchanges shall continue to display on their website, the book building data in a uniform format, inter alia, giving category-wise details of the bids received, for a period of at least three days after the closure of the issue. Such display shall be as per the format specified in Part B of this Schedule. (13) Determination of price (a) The issuer shall, in consultation with the lead manager(s), determine the final issue price based on the bids received, and on determination of the same, the number of specified securities to be offered or issue size shall be determined. (b) Once the final issue price is determined, all bidders whose bids have been at and above the final price shall be considered for allotment of specified securities. (14) 2 [filing] of prospectus with the Registrar of Companies A copy of the prospectus, which shall include the price and the number of specified securities, shall be 4 [ filed ] by the issuer with the Registr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total (a) + (b) (2) Details of Allocation to Investors other than Anchor Investors S. No. Category of Investor No. of securities offered/ reserved No. of securities bid for/allocated No. of times of the total meant for the category 1. QIBs (a) Foreign Portfolio Investors Domestic Financial Institutions (Banks/FIs/Insurance Companies, etc.) (b) Mutual Funds (c) Others 2. Non Institutional Investors (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uity shares b. Balance for all QIBs including Mutual Funds 38 crore equity shares 5 No. of QIB applicants 10 6 No. of shares applied for 500 crore equity shares * Where 50 per cent. of the issue size is required to be allotted to QIBs. (2) Details of QIB Bids S. No. Type of QIB bidders No. of equity shares bid for (in crores) 1 A1 50 2 A2 20 3 A3 130 4 A4 50 5 A5 50 6 MF1 40 7 MF2 40 8 MF3 80 9 MF4 20 10 MF5 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares). (4) The figures at column no. IV are arrived as under: a. For QIBs other than mutual funds (A1 to A5) = No. of equity shares bid for (i.e. column no. II) X 38 / 498 b. For mutual funds (MF1 to MF5) = {(No. of equity shares bid for (i.e. column no. II) less no. of equity shares allotted (i.e. column no. III )} X 38 / 498 c. The numerator and denominator for arriving at allocation of 38 crore equity shares to the 10 QIBs are reduced by 2 crore equity shares, which have already been allotted to the mutual funds at column. no. III. Part D - Alternate method of book building In the case of a further public offering, the issuer may opt for an alternate method of book building, subject to the following: (a) The issuer shall follow the procedure laid down in Part A of this Schedule except clause (13) and 9 [ clause 15 (b) ] thereof. (b) The issuer may mention the floor price in the red herring prospectus or announce the floor price at least one working day before opening of the issue in all newspapers in which the pre-issue advertisement was released. (c) Qualified institutional buyers shall bid only at a price above the floor price. (d) The bidder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k-in of 30 days on the shares allotted to the anchor investors from the date of allotment. 7. Omitted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 w.e.f. 01-04-2022 or 01-07-2022 (Also see F. No. SEBI/LAD-NRO/GN/2022/82 dated 27-04-2022 ) before it was read as, and non-institutional investors 8. Inserted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 w.e.f. 01-04-2022 or 01-07-2022 (Also see F. No. SEBI/LAD-NRO/GN/2022/82 dated 27-04-2022 ) 9. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as clause (15) (c) 10. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/130 dated 23-05-2023 11. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/130 dated 23-05-2023 12. Omitted vide Notification No. SEBI/LAD-NRO/GN/2023/130 dated 23-05-2023 before it was read as, sponsored by the entities 13. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/130 dated 23-05-2023 - - statute, statutory provisions legislation, law, enactment, Acts, Rules, Regulations, Taxation Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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