Sebi moots audio-visual representation of disclosures made in offer docs

Markets watchdog Sebi on Tuesday proposed introducing audio-visual representation of disclosures made by companies in their offer documents for public issues, a move that will help investors have an easier understanding about the key features of an offer.

Comments from stakeholders have been sought on the proposal till April 9.

"It is proposed that the disclosures made in the DRHP (Draft Red Herring Prospectus) and RHP (Red Herring Prospectus) of public issues shall also be made available in Audio Visual (AV) format by the issuer companies desiring to list on the main board.

"Further, the AV on the public issues will be in bilingual version i.e. English and Hindi and made available in the public domain," Sebi said in a circular.

According to the regulator, it is expected that the AV will provide ease in understanding the salient features and also provide reference to various disclosures of the proposed public issue.

The regulator has suggested that the duration of each bilingual version of the AV should be a maximum of 8 minutes. The total duration of the AV should be equitably distributed among the material disclosures made under various sections of the public issue offer document. These include risk factors, capital structure, objects of the offer, business of the issuer, financial information, litigations and material developments.

"The content of the AV shall be factual, non-repetitive and non-promotional in nature... The AV shall be revised with updated information at the stage of RHP," Sebi said in the draft circular.

As per the regulator, the AV should be published by the issuer/lead manager of the offer within 5 working days both at the stage of submission and resubmission of DRHP.

"It shall be made available on digital/social media platforms of the Issuer and Association of Investment Bankers of India (AIBI).

"The web link of the said AV shall be made available on the websites of stock exchanges and the concerned lead managers and shall also be accessible from the QR code pertaining to the public issue," Sebi said.

Companies looking to raise capital through public issues are required to file a DRHP with Sebi and stock exchanges. The disclosures in DRHP are appropriately updated in line with the observations issued by the regulator and the bourses. Later, RHP is filed with Sebi and the Registrar of Companies (RoC).