Specified Securities except SR Equity Shares held by Promoters may be pledged as collateral for a Loan granted by Scheduled Commercial Bank: SEBI [Read Notification]

Specified securities - SR equity shares - promoters - pledged - collateral - loan granted - Scheduled Commercial Bank - SEBI - Taxscan

The Securities and Exchange Board of India (SEBI) has ruled that the specified securities except SR equity shares held by promoters may be pledged as collateral for a loan granted by Scheduled Commercial Bank.

The SEBI has notified the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2022 which seeks to amend Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.

In regulation 7, after sub-regulation (2), in the explanation, the words “For the purposes of this regulation” shall be substituted with the words and numbers “For the purposes of regulation 6 and regulation 7”. The amount for general corporate purposes, and such objects where the issuer company has not identified acquisition or investment target, as mentioned in objects of the issue in the draft offer document and the offer document, shall not exceed thirty five per cent. of the amount being raised by the issuer. Provided that the amount raised for such objects where the issuer company has not identified acquisition or investment target, as mentioned in objects of the issue in the draft offer document and the offer document, shall not exceed twenty five per cent. Provided further that such limits shall not apply if the proposed acquisition or strategic investment object has been identified and suitable specific disclosures about such acquisitions or investments are made in the draft offer document and the offer document at the time of filing of offer documents.”

In regulation 8, in the proviso after the Explanation, the words, symbol and numbers “under the sections 391 to 394 of Companies Act, 1956,” shall be omitted.

After regulation 8 and before regulation 9, the 8A regulation shall be inserted, namely, Additional conditions for an offer for sale for issues under sub-regulation (2) of regulation 6. For issues where draft offer document is filed under sub-regulation (2) of regulation 6 of these regulations shares offered for sale to the public by shareholder(s) holding, individually or with persons acting in concert, more than twenty percent of pre-issue shareholding of the issuer based on fully diluted basis, shall not exceed more than fifty per cent of their pre-issue shareholding on fully diluted basis; and shares offered for sale to the public by shareholder(s) holding, individually or with persons acting in concert, less than twenty percent of pre-issue shareholding of the issuer based on fully diluted basis, shall not exceed more than ten percent of pre-issue shareholding of the issuer on fully diluted basis; for shareholder(s) holding, individually or with persons acting in concert, more than twenty per cent of pre-issue shareholding of the issuer based on fully diluted basis, provisions of lock-in as specified under regulation 17 of these regulations shall be applicable, and relaxation from lock-in as provided under clause (c) of regulation 17 of these regulations shall not be applicable.”

Subscribe Taxscan AdFree to view the Judgment

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.

Related Stories