Saturday, December 15, 2007

A m e n d m e n t s to SEBI public i s s u e ( D I P ) Guidelines, 2000.

Introduction of Fast Track Issues (FTIs)
Listed companies can access Indian primary market through follow-on public offerings and rights issues by filing a copy of the:
  • Red Herring Prospectus (in case of book built issue) 
  • Prospectus (in case of fixed price issue)
registered with the Registrar of Companies or the letter of offer filed with Designated Stock Exchange, as the case may be, with SEBI and stock exchanges instead of filing draft offer document.

Amendments to Guidelines on Issue of Indian Depository receipts (IDRs)
Instead of only Qualified Institutional Buyers (QIBs) now all categories of investors can apply in IDR issues, subject to:
  • at least 50% of the issue being subscribed by QIBs, and 
  • the balance to other categories of investors at the discretion of the issuer, which shall be disclosed in the prospectus.
Further, it has been decided to reduce the minimum application value in IDR from Rs. 2,00,000/- to Rs. 20,000/-.

Quoting of PAN mandatory
All applicants in public and rights issues are required to disclose their PAN/GIR in the application form, which was earlier mandatory only for the applicant applying for the value exceeding Rs. 50,000/-.

 Discount in issue price for retail investors / retail shareholders
Companies making public issues to issue securities to retail individual vainvestors / retail individual shareholders at a discounted price, provided that such discount does not exceed 10% of the price at which securities are issued to other categories of public

Definition of “Retail individual shareholder(RIS)” for listed companies has been amended 
and now RIS means a shareholder
  • whose shareholding is of value not exceeding Rs. 1,00,000/- as on the day immediately preceding the record date(which was Rs. 50,000/- earlier), and
  • who makes application or bids in a public issue for value not exceeding Rs 1,00,000/(earlier this condition was not there)-.-
Clarification on the term CEO / CFO
Shall have the same meaning as assigned to them in clause 49 of the Equity Listing Agreement.

 Deletion of the chapter on “Guidelines for Issue of Capital by Designated Financial Institutions (DFIs)”
It has been decided to remove the special dispensations given to DFIs by deleting the chapter on “Guidelines for Issue of Capital by DFIs” from SEBI (DIP) Guidelines.
 
Monitoring of issue proceeds
 Every issuer making an issue of more than Rs. 500 crores is required to appoint a monitoring agency, which is required to file a monitoring report with SEBI for record purpose. Now this provision shall not apply to
  • issues by banks and public financial institutions and 
  • offers for sale.
Monitoring agency shall henceforth be required to file the monitoring report with the issuer company.

 Amendments to Guidelines for Preferential Issues

Listed companies intending to make preferential allotment shall be required to obtain PAN of each of the applicants of the preferential issue before making the preferential allotment.

 Miscellaneous amendments
SEBI issues standard observations as a supplement to issue-specific observations on each and every draft offer document filed with SEBI. These standard observations are being rationalised / reviewed. Accordingly, it has been decided to amend SEBI (DIP) Guidelines to incorporate certain clauses from the standard observations.

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