TMI BlogSecurities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2022X X X X Extracts X X X X X X X X Extracts X X X X ..... all issues where Red Herring Prospectus is filed with the Registrars of Companies on or after the date of publication of this notification in the Official Gazette. 3. In the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 , - I. in regulation 25, in sub-regulation (1) the words with the concerned regional office of the Board under the jurisdiction of which the registered office of the issuer company is located shall be substituted with the words with the Board . II. after Chapter II and before Chapter III , the following Chapter IIA shall be inserted, namely, - Chapter IIA INITIAL PUBLIC OFFER ON MAIN BOARD THROUGH PRE-FILING OF DRAFT OFFER DOCUMENT Definitions 59A. In this Chapter, unless the context otherwise requires, - (a) pre-filed draft offer document shall mean draft offer document filed with the Board under this Chapter; (b) pre-filed offer document shall mean pre-filed draft offer document or updated draft red herring prospectus-I or updated draft red herring prospectus-II with the Board under this Chapter; (c) updated draft red h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debt instruments, a due diligence certificate from the debenture trustee as per Form B of Schedule V ; (d) an undertaking from the issuer and the lead manager that they shall not conduct marketing or advertisement for the intended issue, in the format as may be specified by the Board from time to time: Provided that all public communications issued or published in any media during the period commencing from the date of the meeting of the board of directors of the issuer in which the public issue is approved till the date of filing of updated draft red herring prospectus-I or withdrawal of pre-filed draft offer document shall be consistent with its past practices. (5) The issuer shall, within two days of pre-filing the draft offer document, make a public announcement in one English national daily newspaper with wide circulation, one Hindi national daily newspaper with wide circulation and one regional language newspaper with wide circulation at the place where the registered office of the issuer is situated, disclosing the fact of filing of pre-filing of the draft offer document without providing any other details in relation to the intended issue: Provided t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the Board have been incorporated in the offer document; (b) a due diligence certificate as per Form CA of Schedule V , at the time of filing of the offer document; (9) The updated draft red herring prospectus-I shall be made public for comments, if any, for a period of at least twenty one days from the date of filing, by hosting it on the websites of the Board, the stock exchanges where the specified securities are proposed to be listed and that of the lead manager(s) associated with the issue: Provided that pursuant to the filing of the updated draft red herring prospectus-I, all public communication, publicity material, advertisements and research reports shall comply with the provisions of Schedule IX . (10) The issuer shall, within two days of filing the updated draft red herring prospectus-I, make a public announcement in one English national daily newspaper with wide circulation, one Hindi national daily newspaper with wide circulation and one regional language newspaper with wide circulation at the place where the registered office of the issuer is situated, disclosing the fact of filing of the updated draft red herring prospectus-I and invit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copy. (16) The issuer and the lead manager(s) shall ensure that the offer documents are hosted on the websites as required under these regulations and that its contents are the same as the versions filed with the Registrar of Companies, the Board and the stock exchanges, as may be applicable. (17) The lead manager(s) and the stock exchanges shall provide the copies of the offer document to the public as and when requested and may charge a reasonable sum for providing the same. Interaction with qualified institutional buyers 59D. (1) Notwithstanding anything to the contrary contained in the provisions of this Chapter, an issuer may interact with the qualified institutional buyers for limited marketing of the intended issue from the time of pre-filing the draft offer document till the Board issues any observations on such pre-filed draft offer document. (2) The interaction specified under sub-regulation (1) shall be restricted to the information contained in the pre-filed draft offer document. (3) In case the issuer interacts with the qualified institutional buyers in terms of sub-regulation (1) and sub-regulation (2) above, the issuer and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urities shall be converted. (2) If there are any changes in the pre-filed draft offer document after the Board recommends any changes or issues observations on such pre-filed draft offer document in relation to the matters specified in Schedule XVI-A , an updated pre-filed draft offer document or a fresh pre-filed draft offer document, as the case may be, shall be filed with the Board along with fees specified in Schedule III . Explanation: For the purpose of this regulation, changes made in the pre-filed draft offer document in relation to the matters specified in clause (1) of Schedule XVIA before the Board recommends any changes or issues observations on the pre-filed draft offer document shall not require fresh filing of such pre-filed draft offer document. (3) If there are any changes in the updated draft red herring prospectus-I in relation to the matters specified in Schedule XVI , an updated pre-filed offer document or a fresh draft offer document under Chapter II or fresh pre-filed draft offer document, as the case may be, shall be filed with the Board along with fees specified in Schedule III . (4) Subject to the compliance with the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y five percent shall be substituted with the words till hundred percent. VII. after regulation 173, the following regulation (173A) shall be inserted, namely, - Monitoring agency 173A. (1) If the issue size, excluding the size of offer for sale by selling shareholders, exceeds one hundred crore rupees, the issuer shall make arrangements for the use of proceeds of the issue to be monitored by a credit rating agency registered with the Board: Provided that nothing contained in this clause shall apply to an issue of specified securities made by a bank or public financial institution or an insurance company. (2) The monitoring agency shall submit its report to the issuer in the format specified in Schedule XI on a quarterly basis, till hundred percent of the proceeds of the issue have been utilised. (3) The board of directors and the management of the issuer shall provide their comments on the findings of the monitoring agency as specified in Schedule XI. (4) The issuer shall, within forty five days from the end of each quarter, upload the report of the monitoring agency on its website and also submit the same to the stock exchange(s) on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d decision as to the investment in the proposed issue and such disclosures are in accordance with the requirements of the Companies Act, 2013, these regulations and other applicable legal requirements. (3) Besides us, all intermediaries named in the pre-filed draft offer document are registered with the Board and till date; such registration is valid. (4) We have satisfied ourselves about the capability of the underwriters to fulfil their underwriting commitments. (5) Written consent from the promoters has been obtained for inclusion of their specified securities as part of the promoters contribution subject to lock-in and the specified securities proposed to form part of the promoters contribution that are subject to lock-in shall not be disposed or sold or transferred by the promoters during the period starting from the date of pre-filing the draft offer document with the Board till the date of commencement of lock-in period as stated in the draft offer document. (6) All applicable provisions of these regulations, which relate to specified securities ineligible for computation of promoters contribution, have been and/or shall be duly complied with and appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to the business, experience of the promoters and that the related party transactions entered into for the period disclosed in the offer document have been entered into by the issuer in accordance with applicable laws. We enclose a checklist confirming regulation-wise compliance with the applicable provisions of these regulations, containing details such as the regulation number, its text, the status of compliance, page number of the pre-filed draft offer document where the regulation has been complied with and our comments, if any. We also enclose plan of action for compliance with Regulation 8 and Regulation 15. Place: Lead Manager(s) to the Issue Date: with Official Seal(s) (iii) in Form C- (a) Before the title, after word, numbers and symbols regulation 25 (9) (b) , the numbers and symbols 59C (13) shall be inserted. (b) In clause 4, the words with the Board till date shall be substituted with the words or pre-filing offer document with the Board till date . XI. in Schedule V , after Form-C and before Form-D, the following Form-CA shall be inserted, namely[ FO RM CA - FORMAT OF DUE DILIGENCE CE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), namely, - (3) For all the Key Performance Indicators (KPIs) disclosed in the offer document, the Issuer Company and the lead merchant bankers (LMs) shall ensure the following: (a) KPIs disclosed in the offer document and the terms used in KPIs shall be defined consistently and precisely in the Definitions and Abbreviations section of the offer document using simple English terms /phrases so as to enable easy understanding of the contents. Technical terms, if any, used in explaining the KPIs shall be further clarified in simple terms. (b) KPIs disclosed in the offer document shall be approved by the Audit Committee of the Issuer Company. (c) KPIs disclosed in the offer document shall be certified by the statutory auditor(s) or Chartered Accountants or firm of Charted Accountants, holding a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India or by Cost Accountants, holding a valid certificate issued by the Peer Review Board of the Institute of Cost Accountants of India. (d) Certificate issued with respect to KPIs shall be included in the list of material documents for inspection. (e) For each KPI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue to disclose the KPIs which were disclosed in the 'Basis for Issue Price' section of the offer document, on a periodic basis, at least once in a year (or for any lesser period as determined by the Issuer Company), for a duration that is at least the later of (i) one year after the listing date or period specified by the Board; or (ii) till the utilization of the issue proceeds as per the disclosure made in the objects of the issue section of the prospectus. Any change in these KPIs, during the aforementioned period, shall be explained by the Issuer Company. The ongoing KPIs shall continue to be certified by a member of an expert body as per clause 3(c). (4) For issue price, floor price or price band, as the case may be, disclosed in the offer document, the Issuer Company and the lead merchant banker (LMs) shall disclose the details with respect to the following: (a) Price per share of Issuer Company based on primary / new issue of shares (equity/convertible securities), excluding shares issued under ESOP/ESOS and issuance of bonus shares, during the 18 months preceding the date of filing of the DRHP / RHP, where such issuance is equal to or more than 5 per cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... WACA of Secondary transactions [●] times [●] times (d) Detailed explanation for offer price / cap price being [●] times of WACA of Primary issuance price / Secondary transaction price, along with comparison of Issuer Company s KPIs and financials ratios for the last three full financial years and stub period (if any) included in the offer document. (e) Explanation for offer price / cap price being [●] times of WACA of Primary issuance price / Secondary transaction price in view of the external factors which may have influenced the pricing of the issue, if any. (f) Table at para (c) above shall be disclosed in the Price Band Advertisement under 'Risks to Investors' section. Recommendation of a Committee of Independent Directors to be included in the price band advertisement stating that the price band is justified based on quantitative factors / KPIs disclosed in 'Basis for Issue Price' section vis- -vis the WACA of primary issuance / secondary transaction(s) disclosed in 'Basis for Issue Price' section. XIV. in Schedule IX , in the title, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quire filing of the updated pre-filed offer document with the Board, along with fees: (a) If changes are made in the pre-filed offer document with respect to any of the following, the issuer shall file an updated offer document with the Board, along with payment of fees as specified in Schedule III: (i) Section 1: Risk Factors: Any material development which may result in potential risk and may require updation in this section. (ii) Section 2: Capital Structure: An aggregate increase of 5 percent or more in the shareholding of the promoter or promoter group or an aggregate increase of 5 per cent. or more in the shareholding of the top ten shareholders. (iii) Section 3: Issue Size: Any addition or deletion to the objects of the issue resulting in a change in the estimated issue size or estimated means of finance by more than 10 percent and not exceeding 20 per cent. (iv) Section 4: Management: Appointment of any new director. (v) Section 5: Promoter Group: Any addition to the promoter group or group companies. (vi) Section 6: Financial Statements: Any variation in net profit after tax or net loss and/ or extraordinary items in excess of 10 percent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 26, 2019 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Sixth Amendment) Regulations, 2019, vide notification No. SEBI/LADNRO/ GN/2019/47. (h) January 01, 2020 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Seventh Amendment) Regulations, 2019, vide notification No. SEBI/LADNRO/ GN/2020/01. (i) April 17, 2020 by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2020 vide notification No. SEBI/LAD-NRO/GN/2020/10. (j) May 08, 2020 by the Securities and Exchange Board of India (Payment of Fees) (Amendment) Regulations, 2020, vide notification No. SEBI/LAD-NRO/GN/2020/11. (k) June 16, 2020 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2020, vide notification No. SEBI/LADNRO/ GN/2020/17. (l) June 22, 2020 by the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2020, vide notification No. SEBI/LADNRO/ GN/2020/18. (m) July 1, 2020 by the Securities and Exchange Board of India (Issue of Capital and Di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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