The relaxation will be applicable to entities that have raised funds by issuing securities to more than 49 persons, but up to 200 individuals in a financial year.
Under the Companies Act, 2013 -- whose most provisions came into effect from April 1, 2014 -- any offer or allotment of securities is considered as public issue if the number of allottees exceeds 200 persons in a financial year. This provision replaced the cap of 49 persons in the Companies Act, 1956.
"...Firms may avoid penal action if they provide the investors with an option to surrender securities and get the refund amount at a price not less than amount of subscription money paid along with 15 per cent interest per annum thereon or such higher return as promised to investors," Sebi said.
The move on public issues also took into consideration the interest of investors while recognising their right to stay invested in case they feel it is beneficial to them.
Such companies will be allowed to adjust the amounts already paid to the allottees either as interest, dividend or otherwise from the amount of refund to be paid to investors.
In the case of transfer of securities by the original allottees, option for refund may be provided to the current holders of the securities.
The repayment made by the company following the option for refund exercised by investors will have to be certified by independent practising chartered accountants, company secretaries or cost accountants.
The refund will be supported by proof of dispatch through registered or Speed Post or proof of delivery of letters if effected through any other mode.