Sebi extends relaxation on validity of nod to launch IPO, rights issue

The move comes following representations from the industry, the Securities and Exchange Board of India said in a circular

Markets regulator Sebi on Tuesday extended relaxations till March 31 pertaining to validity of regulatory approval for launching IPO and rights issue, in view of the prevailing conditions due to COVID-19 pandemic.

In addition, the relaxation has been extended in respect of filing of fresh offer document in case of increase or decrease of issue size by 50 per cent.

The move comes following representations from the industry, the Securities and Exchange Board of India (Sebi) said in a circular.

The validity of Sebi's observations, expiring between October 1, 2020, and March 31, 2021, has been extended up to March 31, 2021, the regulator noted.

This is subject to an undertaking from lead manager of the issue confirming compliance with the ICDR (Issue of Capital and Disclosure Requirements) Regulations while submitting the updated offer document to Sebi, it said.

According to the norms, a public issue/rights issue needs to be opened within 12 months from the date of issuance of observations by Sebi.

Sebi's observation is necessary for any company to launch public issues.

The regulator said that an issuer, whose offer document for IPO, follow-on public offer and rights issue is pending receipt of its observation, will be permitted to increase or decrease the fresh issue size by up to 50 per cent of the estimated issue size. This can be done without requiring to file fresh draft offer document with the Sebi, it added.

The relaxation is subject to no change in the objects of the issue, and the lead manager will need to ensure that all appropriate changes are made to the relevant section of draft offer documents, and an addendum in this regard will be made public.

After due consideration, it has been decided that the relaxation with regard to revision in issue size up to 50 per cent will continue till March 31, 2021, Sebi said.

Under the norms, any increase or decrease in estimated fresh issue size by more than 20 per cent of the estimated fresh issue size require fresh filing of the draft offer document along with fees.

The circular will come into force from October 1, it added.

Earlier in April, the validity of Sebi's observation, where the same have expired or will expire between March 1, 2020 and September 30, 2020, was extended by 6 months from the date of expiry of such observation.