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Ca dhruv agrawalsebi icdr amendments
 

Ca dhruv agrawalsebi icdr amendments

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    Ca dhruv agrawalsebi icdr amendments Ca dhruv agrawalsebi icdr amendments Presentation Transcript

    • SEBI (ICDR) Regulations 2009 and Recent Amendments
      Simplifying the Issue Management
      CA DHRUV AGRAWAL
    • An Overview
      SEBI (ICDR) Regulations deals with Issue of Specified Securities by a new Issuer or a Listed Issuer.
      Specified Securities as defined under SEBI ICDR Regulations
      vs. Securities as defined under SCRA:
      Equity Shares
      Non-Convertible Preference Shares
      Stocks
      Bonds Debentures
      Debentures Stock Derivates
      Convertible Preference Shares
      Units Issued by CIS Govt. Securities
      Convertible Securities
      Any marketable securities
      CA DHRUV AGRAWAL
    • Structure of ICDR Regulations
      SEBI (ICDR) Regulations, 2009
      Preferential Issues
      Public Issues
      Bonus Issues
      IDR Issues
      Right Issues
      QIP
      Issues by SMEs
      General Obligations of Issuer and Merchant Banker in Public Issue / Right Issue
      Schedules
      CA DHRUV AGRAWAL
    • What ICDR does not Regulate
      Public Issue of Debt Securities
      (Regulated by SEBI (Issue and Listing of Debt Securities) Regulations 2008)
      Issue of ADRs / GDRs
      (Regulated by RBI FCCBs and Ordinary Shares [Through Depository Receipt Mechanism] Scheme, 1993 )
      Issue of FCCBs
      (Regulated by RBI FCCBs and Ordinary Shares [Through Depository Receipt Mechanism] Scheme, 1993
      Issue of shares pursuant to ESOPs
      (Regulated by SEBI (Employee Stock Option Plan and Employee Stock Purchase Scheme) Guidelines, 1999)
      CA DHRUV AGRAWAL
    • ICDR vs. DIP
      Exemption to certain banking and infrastructure companies from eligibility norms for making initial public offers (IPOs) is withdrawn.
      Offer for Sale by Listed Companies Allowed 
      Allotment on Firm Basis to specified categories is removed.
      Contribution by persons belonging to promoter group is no more covered under Promoters’ Contribution.
      Underwriting obligation is extended to the whole issue not just up to minimum subscription.
      CA DHRUV AGRAWAL
    • ICDR vs. DIP – Contd.
      75% Book Building route is withdrawn.
      Efficient procedure and adequate disclosures under Book-Building Process Specified.
      Mandatory requirement of disclosure of any pledge of shares by promoters.
      Power to Stock Exchange to order revaluation of non-cash consideration for preferential allotment to promoters or related persons.
      CA DHRUV AGRAWAL
    • Public Issues Framework
      Public Issue Framework under SEBI (ICDR) Regulations
      Type & Procedure
      Eligibility Requirements
      Allocation of Issue
      Pricing
      Promoters’ Contribution & Lock-in
      Book Build Issue
      Fixed Issue
      Issue Period
      CA DHRUV AGRAWAL
    • Eligibility Requirements
      Primary Eligibility Requirements
      Rs. 3 Crores (Net Tangible Assets) in last 3 years
      Rs. 1 Crore (Net Worth) in last 3 years
      Distributable profits for 3 years in last 5 years
      In case of change of name, 50% revenues from activity suggested by new name
      Aggregate of all issues in one financial year not to exceed 5 times issuer’s pre issue net worth
      Alternate Eligibility Requirements:
      Issue through Book-Building Process with minimum 50% net offer to QIBs ;OR
      ‘Project’ has 15% participation from financial institutions/scheduled commercial banks of which 10% comes from appraisers and min. 10% net offer to QIBs
      AND
      10 Crores minimum post issue face value capital; OR
      2 years of compulsory market making post issue
      CA DHRUV AGRAWAL
    • Other Pre-requisites
      Prospective allottees to be not less than 1000.
      Compulsory IPO Grading by credit rating agency before filling RHP with ROC
      No outstanding convertible securities or other right which would entitle the existing promoters or shareholders any option to receive equity shares after public offer.
      Firm arrangements of finance, through verifiable means, for 75% of the stated means of finance excluding the amount to be raised through the public issue to be made.
      Partly paid up shares to be made fully paid or forfeited in the manner specified, before the public offering.
      CA DHRUV AGRAWAL
    • Other Key Decisive Criteria
      CA DHRUV AGRAWAL
      GLOBAL ACADEMY
    • Minimum Listing Requirements
      CA DHRUV AGRAWAL
    • Minimum Listing Requirement -BSE
      CA DHRUV AGRAWAL
    • Minimum Listing Requirement -BSE
      CA DHRUV AGRAWAL
    • Minimum Listing Requirement -NSE
      CA DHRUV AGRAWAL
    • Minimum Listing Requirement -NSE
      CA DHRUV AGRAWAL
    • Type & Procedure
      CA DHRUV AGRAWAL
    • A Comparative Analysis
      CA DHRUV AGRAWAL
    • Alternate Method of Book-Building
      Disclosure of Floor Price
      QIBs shall bid at any price above the floor price
      Allotment to QIB investors on Price Priority Basis i.e. Highest bidders get the bided number of shares
      Allotment of other investors on proportionate basis
      Other investors will be allotted shares at Floor Price
      Issuer may
      put a cap on number of specified securities
      Allow bidders to revise their bids
      Allow bidders to make multiple bids
      CA DHRUV AGRAWAL
    • Listing and trading
      Pre-IPO Structuring
      Closing and
      Allotment
      Final Phase
      Kick Off Meeting
      Preparatory Phase of Issue
      RoC filing of final
      Prospectus
      Due Diligence and Documentation
      Marketing Phase of Issue
      Filing with SEBI and SE
      Pre-Marketing
      SEBI Approval &
      RoC Filing
      Roadshows & Price Band Discovery
      Book building and Pricing
      Procedure
      CA DHRUV AGRAWAL
    • Pricing
      Free Pricing – Price to be determined by Issuer in consultation with Lead Merchant Banker
      Differential Pricing
      Retail Individual Investor my be offered shares at less price than that of other categories
      Anchor investors can not be offered shares at less price than any that of other categories
      In case of Composite issue, the price of public issue and right issue can be different.
      In case of alternate method of book building, shares may be issued to employees at lower price.
      (the differential pricing shall not be more than 10% of the floor price)
      CA DHRUV AGRAWAL
    • Pricing Contd.
      CA DHRUV AGRAWAL
    • Pricing Contd.
      CA DHRUV AGRAWAL
    • Promoters’ Contribution
      OR
      OR
      Certain specified securities are ineligible for minimum promoters’ contribution
      CA DHRUV AGRAWAL
    • Securities are ineligible for minimum promoters’ contribution
      Securities acquired during the preceding 3 years for consideration other than cash.
      Specified securities acquired during the preceding 1 year at a price below Issue price,
      However, if promoters pay the difference, or acquired pursuant to merger etc., then such securities are eligible.
      Securities allotted to promoters acquired during the preceding 1 year at a price below Issue price against funds brought in by them in case of conversion of partnership firm into company.
      Securities pledged with any creditor.
      CA DHRUV AGRAWAL
    • Pricing and Lock-in of Promoters’ Contribution
      CA DHRUV AGRAWAL
    • Allocation of Issue – Book Building Route
      Issue Size
      Offer through offer document
      Promoters’ Contribution
      Min. 20% of Issue Size
      Reservation
      Net offer to public
      Min. 25% of Issue Size
      Retail individual investor
      QIB
      Non-institutional investor
      Min. 15% of NOP
      Max. 50% of NOP
      Min. 35% of NOP
      Anchor Investor
      Mutual Funds
      Min. 5% of NOP
      Max. 30% of QIB
      CA DHRUV AGRAWAL
    • Allocation of Issue – Fixed Price Issue
      Issue Size
      Offer through offer document
      Promoters’ Contribution
      Min. 20% of Issue Size
      Reservation
      Net offer to public
      Min. 25% of Issue Size
      Other investors
      Retail Individual Investors
      Min. 50% of NOP
      Max. 50% of NOP
      CA DHRUV AGRAWAL
    • Issue Period
      CA DHRUV AGRAWAL
    • Key Terms of Issue
      CA DHRUV AGRAWAL
    • Key Considerations in Public Issue
      Fund requirement vs. maximum dilution
      Offer for sale or Fresh Issue or Combination of both
      Fixed Price issue or Book Building Issue
      Stock Exchanges, where to list.
      Involvement of Anchor Investor
      % of allotment to different category of investor.
      CA DHRUV AGRAWAL
    • Right Issue & Key Considerations
      Right Issue
      Meaning – Issue of shares by a company to its existing shareholders
      Free Pricing
      Issue of Letter of Offer
      Key Considerations
      Rights Issue vs. Further Public offering
      Extent of Capital Expansion and its impact on EPS
      Increase in Promoters’ shareholding and applicability of SEBI Takeover Code.
      Reservation of rights for convertible instruments.
      CA DHRUV AGRAWAL
    • Preferential Issue – Key Considerations
      Allotment of warrants or shares
      Relevant date for allotment of warrants – GM to approve allotment or BM to convert warrants
      Eligibility of allotees
      Shareholding of allottee should be in demat form
      No Prior sale of shares by the allottee
      Relationship with promoters and with other allottees shall be checked
      Allottee should have PAN No.
      Lock-in of securities for 3 years in case of promoters and 1 year in case of non-promoter.
      CA DHRUV AGRAWAL
    • QIP – Key Considerations
      Relaxed timeline allowed upto a period of 12 months
      Conversion Period of eligible convertible securities is 60 Months
      Pricing of issue is allowed at the time of opening of Issue.
      No lock-in on acquisition of shares through QIP.
      Minimum allotment of 10% to Mutual Funds.
      FDI norms are applicable on allotment to NRIs.
      CA DHRUV AGRAWAL
    • Recent Amendments in ICDR
      28 Aug 2009
      Promulgation of Regulations
      29 Sep 2009
      5 Copies of Offer document of Issue size upto Rs. 50 Crores to be filed with regional office and Offer document of Issue Size exceeding Rs. 50 Crores to be filed with Head office
      29 Sep 2009
      Explanation of ASBA facility such as Meaning of ASBA, Self-certified Syndicate Bank, Eligibility of Investors, Timelines, Process in brief.
      01 Jan 2010
      -Facility of ASBA extended from Book-Built Public and Right Issues to all Public and Right Issue
      11 Dec 2009
      • Amendment in Provisions wrt reservations
      • Amendment in Provisions wrt Financial Statements
      • Alternate Method of Book Building
      CA DHRUV AGRAWAL
      9810425103
    • Recent Amendment in ICDR
      08 Jan 2010
      - Amendment in Provisions relating to differential pricing in Alternate Method of Book Building
      05 Mar 2010
      Mandatory disclosures of details of allottees in QIP and the corresponding Pre and Post QIP issuer shareholding of allottee in the Issuer company.
      06 Apr 2010
      Facility of ASBA extended to QIBs also which was not earlier available to them.
      13 Apr 2010
      • Definition of Employee extended to cover Employees of Holding & Subsidiary Companies
      • Min. 30% allocation to RII in case of public issue of IDRs
      • Introduction of Issue of specified securities by SMEs
      9810425103
      CA DHRUV AGRAWAL
    • Recent Amendments in ICDR
      22 Apr 2010
      Reduction in Time between Issue closure and listing from average 22 days to 12 days
      26 Apr 2010
      Guidelines for market makers on Small and Medium Enterprise (SME) exchange/separate platform of existing exchange having nation wide terminal
      17 May 2010
      Issue of Model Equity Listing Agreement for SMEs
      18 May 2010
      Setting up of a Stock exchange/ a trading platform by a recognized stock exchange having nationwide trading terminals for SME
      CA DHRUV AGRAWAL
      9810425103
    • Highlights of Amendments
      CA DHRUV AGRAWAL
    • Audit of Financial Statements
      The financial statements stated in RHP can be certified by only those auditors who have subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the ‘Peer Review Board’ of the ICAI.
      Otherwise, Re-audit of Financial statements for one full financial year and the stub period.
      CA DHRUV AGRAWAL
    • Definition of Employee
      Employee for the purpose of reservation shall cover
      a permanent and full-time employee, working in India or abroad, of:
      the issuer
      its Holding Company
      Its Subsidiary Company
      Its material associates
      a director of the issuer, whether whole time or part time.
      But does not include promoters and an immediate relative of the promoter
      CA DHRUV AGRAWAL
    • Issue and Listing of shares by SMEs
      CA DHRUV AGRAWAL
    • Issue and Listing of shares by SMEs
      No need to filing DRHP with SEBI before filing it with ROC or DSE
      SEBI will not give observations on offer document
      100% underwriting of issue is mandatory.
      Minimum 15% underwriting obligation of Merchant Banker
      Nominated Investors can also underwrite the issue
      Minimum Application Value = Rs. 1 Lac
      Minimum Number of Allottee = 50
      Compulsory Market Making for minimum 3 years
      Promoters’ holding is not eligible for being offered to market maker
      CA DHRUV AGRAWAL
    • CA DHRUV AGRAWAL
      CONTACT
      GLOBAL ACADEMY OF PROFESSIONS
      D 60, 3RD FLR,LAXMI NAGAR,
      DELHI-92
      9810425103