SEBI amends IPO Regulations to enhance ease of doing business and increase participation of retail investors

The Securities and Exchange Board of India (Sebi) on Wednesday approved the amendments to SEBI Issue of Capital and Disclosure Requirements (ICDR) Regulations, 2018 to streamline certain requirements relating to public issue to enhance ease of doing business and increase the engagement and participation of retail investors. Board has approved amendment to ICDR to prescribe that in case lock-in of the specified securities cannot be created, the depositories shall record such securities as "non-transferable" for the duration of the applicable lock-in period.

The depositories through their system shall ensure that, subsequent to the invocation or release of pledge, the shares in the account of the beneficiary (pledger or pledgee) shall automatically be locked-in for the balance period, as required under the ICDR Regulations. The new procedure will ensure compliance with the requirement of lock-in of certain shares even when they are pledged.

In order to increase the engagement and participation of the retail investors in the IPO process, the Board has approved that a focused, concise and standardized summary of offer documents in the form of draft abridged prospectus shall be available at the DRHP stage as well, in addition to the current requirement of filing of abridged prospectus at the RHP stage. Board has also approved the proposal to rationalise the disclosures in the abridged prospectus. The abridged prospectus shall be hosted on the websites as required under these regulations.

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