The document discusses the SEBI (ICDR) Regulations 2009 and recent amendments relating to issue management. It provides an overview of the key aspects regulated by the ICDR regulations including specified securities, structure of regulations, issues not regulated, and eligibility requirements for public issues. Recent amendments are highlighted including changes to preferential issues, QIP, book building process and minimum listing requirements. Key considerations for different types of public issues such as pricing, allocation and lock-ins are also summarized.

1. SEBI (ICDR) Regulations 2009 and Recent Amendments Simplifying the Issue ManagementCA DHRUV AGRAWAL

2. An OverviewSEBI (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 DerivatesConvertible Preference Shares Units Issued by CIS Govt. SecuritiesConvertible SecuritiesAny marketable securitiesCA DHRUV AGRAWAL

3. Structure of ICDR RegulationsSEBI (ICDR) Regulations, 2009Preferential IssuesPublic IssuesBonus IssuesIDR IssuesRight IssuesQIPIssues by SMEsGeneral Obligations of Issuer and Merchant Banker in Public Issue / Right IssueSchedulesCA DHRUV AGRAWAL

4. What ICDR does not RegulatePublic 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

5. ICDR vs. DIPExemption to certain banking and infrastructure companies from eligibility norms for making initial public offers (IPOs) is withdrawn.Offer for Sale by Listed Companies Allowed Allotment on Firm Basis to specified categories is removed.Contribution by persons belonging to promoter group is no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

6. ICDR vs. DIP – Contd.75% Book Building route is withdrawn.Efficient procedure and adequate disclosures under Book-Building Process Specified.Mandatory requirement of disclosure of any pledge of shares by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

7. Public Issues FrameworkPublic Issue Framework under SEBI (ICDR) RegulationsType & ProcedureEligibility RequirementsAllocation of IssuePricingPromoters’ Contribution & Lock-inBook Build IssueFixed IssueIssue PeriodCA DHRUV AGRAWAL

8. Eligibility RequirementsPrimary Eligibility RequirementsRs. 3 Crores (Net Tangible Assets) in last 3 yearsRs. 1 Crore (Net Worth) in last 3 yearsDistributable profits for 3 years in last 5 yearsIn case of change of name, 50% revenues from activity suggested by new nameAggregate of all issues in one financial year not to exceed 5 times issuer’s pre issue net worthAlternate 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 QIBsAND10 Crores minimum post issue face value capital; OR2 years of compulsory market making post issueCA DHRUV AGRAWAL

9. Other Pre-requisitesProspective allottees to be not less than 1000.Compulsory IPO Grading by credit rating agency before filling RHP with ROCNo 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

10. Other Key Decisive CriteriaCA DHRUV AGRAWALGLOBAL ACADEMY

11. Minimum Listing Requirements CA DHRUV AGRAWAL

12. Minimum Listing Requirement -BSECA DHRUV AGRAWAL

13. Minimum Listing Requirement -BSECA DHRUV AGRAWAL

14. Minimum Listing Requirement -NSECA DHRUV AGRAWAL

15. Minimum Listing Requirement -NSECA DHRUV AGRAWAL

16. Type & ProcedureCA DHRUV AGRAWAL

17. A Comparative AnalysisCA DHRUV AGRAWAL

18. Alternate Method of Book-BuildingDisclosure of Floor PriceQIBs shall bid at any price above the floor priceAllotment to QIB investors on Price Priority Basis i.e. Highest bidders get the bided number of sharesAllotment of other investors on proportionate basisOther investors will be allotted shares at Floor PriceIssuer mayput a cap on number of specified securitiesAllow bidders to revise their bidsAllow bidders to make multiple bidsCA DHRUV AGRAWAL

19. Listing and tradingPre-IPO StructuringClosing andAllotmentFinal PhaseKick Off MeetingPreparatory Phase of IssueRoC filing of finalProspectusDue Diligence and DocumentationMarketing Phase of IssueFiling with SEBI and SEPre-MarketingSEBI Approval &RoC FilingRoadshows & Price Band DiscoveryBook building and PricingProcedureCA DHRUV AGRAWAL

20. PricingFree Pricing – Price to be determined by Issuer in consultation with Lead Merchant BankerDifferential Pricing Retail Individual Investor my be offered shares at less price than that of other categoriesAnchor investors can not be offered shares at less price than any that of other categoriesIn 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

21. Pricing Contd.CA DHRUV AGRAWAL

22. Pricing Contd.CA DHRUV AGRAWAL

23. Promoters’ ContributionORORCertain specified securities are ineligible for minimum promoters’ contributionCA DHRUV AGRAWAL

24. Securities are ineligible for minimum promoters’ contributionSecurities 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

25. Pricing and Lock-in of Promoters’ ContributionCA DHRUV AGRAWAL

26. Allocation of Issue – Book Building RouteIssue SizeOffer through offer documentPromoters’ ContributionMin. 20% of Issue SizeReservationNet offer to publicMin. 25% of Issue SizeRetail individual investorQIBNon-institutional investorMin. 15% of NOPMax. 50% of NOPMin. 35% of NOPAnchor InvestorMutual FundsMin. 5% of NOPMax. 30% of QIBCA DHRUV AGRAWAL

27. Allocation of Issue – Fixed Price IssueIssue SizeOffer through offer documentPromoters’ ContributionMin. 20% of Issue SizeReservationNet offer to publicMin. 25% of Issue SizeOther investorsRetail Individual InvestorsMin. 50% of NOPMax. 50% of NOPCA DHRUV AGRAWAL

28. Issue PeriodCA DHRUV AGRAWAL

29. Key Terms of IssueCA DHRUV AGRAWAL

30. Key Considerations in Public IssueFund requirement vs. maximum dilutionOffer for sale or Fresh Issue or Combination of bothFixed Price issue or Book Building IssueStock Exchanges, where to list.Involvement of Anchor Investor% of allotment to different category of investor.CA DHRUV AGRAWAL

31. Right Issue & Key ConsiderationsRight IssueMeaning – Issue of shares by a company to its existing shareholdersFree PricingIssue of Letter of OfferKey ConsiderationsRights Issue vs. Further Public offeringExtent of Capital Expansion and its impact on EPSIncrease in Promoters’ shareholding and applicability of SEBI Takeover Code.Reservation of rights for convertible instruments.CA DHRUV AGRAWAL

32. Preferential Issue – Key ConsiderationsAllotment of warrants or sharesRelevant date for allotment of warrants – GM to approve allotment or BM to convert warrantsEligibility of alloteesShareholding of allottee should be in demat formNo Prior sale of shares by the allotteeRelationship with promoters and with other allottees shall be checkedAllottee 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

33. QIP – Key ConsiderationsRelaxed timeline allowed upto a period of 12 monthsConversion Period of eligible convertible securities is 60 MonthsPricing 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

34. Recent Amendments in ICDR28 Aug 2009Promulgation of Regulations29 Sep 20095 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 2009Explanation 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 Issue11 Dec 2009 Amendment in Provisions wrt reservations

35. Amendment in Provisions wrt Financial Statements

36. Alternate Method of Book BuildingCA DHRUV AGRAWAL9810425103

37. Recent Amendment in ICDR08 Jan 2010- Amendment in Provisions relating to differential pricing in Alternate Method of Book Building05 Mar 2010Mandatory disclosures of details of allottees in QIP and the corresponding Pre and Post QIP issuer shareholding of allottee in the Issuer company.06 Apr 2010Facility of ASBA extended to QIBs also which was not earlier available to them.13 Apr 2010Definition of Employee extended to cover Employees of Holding & Subsidiary Companies

38. Min. 30% allocation to RII in case of public issue of IDRs

39. Introduction of Issue of specified securities by SMEs9810425103CA DHRUV AGRAWAL

40. Recent Amendments in ICDR22 Apr 2010Reduction in Time between Issue closure and listing from average 22 days to 12 days 26 Apr 2010Guidelines for market makers on Small and Medium Enterprise (SME) exchange/separate platform of existing exchange having nation wide terminal17 May 2010Issue of Model Equity Listing Agreement for SMEs18 May 2010Setting up of a Stock exchange/ a trading platform by a recognized stock exchange having nationwide trading terminals for SMECA DHRUV AGRAWAL9810425103

41. Highlights of AmendmentsCA DHRUV AGRAWAL

42. Audit of Financial StatementsThe 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