11 Jun 2020
Introduction
Securities and Exchange Board of India (SEBI) had earlier introduced certain temporary relaxations in eligibility conditions for fast track rights issue (discussed in our update dated 22 April 2020, accessible here). In continuation, SEBI has on 9 June 2020, introduced similar relaxations in eligibility conditions for further public offers (FPOs) through the fast track route provided under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations). The relaxations introduced are only applicable to FPOs and do not extend to issuance of warrants.
Relaxations introduced
Issuers may carry out an FPO through the fast track route if the eligibility conditions specified under the ICDR Regulations are met. SEBI has introduced the following temporary relaxations in eligibility conditions for fast track FPOs that open on or before 31 March 2021:
| S. No. | Particulars | Previous Requirement | Relaxation Introduced |
| 1. | Market Capitalisation | The average market capitalisation of public shareholding of the issuer should be at least Rs. 1,000 crore in case of public issue. | The average market capitalisation of public shareholding of the issuer has been reduced to Rs. 500 crore. |
| 2. | Legal Proceedings | As on the reference date, no show-cause notices should have been issued or prosecution proceedings have been initiated by SEBI and be pending against the issuer, its promoters or whole-time directors. | Any show-cause notice issued by SEBI under adjudication proceedings have been excluded from this eligibility condition. |
| 3. | Violation of Securities Laws | The issuer, promoter, promoter group or director of the issuer has not settled any alleged violation of securities laws through the consent or settlement mechanism with SEBI in the last 3 years immediately preceding the reference date. | Where any such violations are settled, the relevant entity has fulfilled the terms of settlement or adhered to directions of the settlement order through the consent or settlement mechanism with SEBI. |
| 4. | Audit Qualifications | Impact of audit qualifications on the audited accounts of the issuer for those financial years for which such accounts are disclosed in the letter of offer does not exceed 5% of net profit or loss after tax of the issuer for the respective years. | Impact of audit qualifications on the audited accounts of the issuer should be disclosed and accounts should be accordingly restated.
Any qualifications for which the impact cannot be ascertained must be appropriately disclosed in the offer documents. |
A Comparative Analysis of the New Criminal Bills and the Existing Codes
21 Nov 2023
Interplay of the Insolvency and Bankruptcy Code, 2016 with the provisions of the Income Tax Act, 1961
20 Nov 2023
Supreme Court ruling on the Most Favoured Nation clause likely to withhold benefits for taxpayers
17 Nov 2023If you would like to receive content directly in your inbox from our knowledge repository, please complete this subscription form. This service is reserved for clients and eligible contacts.
Under the rules of the Bar Council of India, Trilegal is prohibited from soliciting work or advertising in any form or manner. By accessing this website, www.trilegal.com, you acknowledge that:
We prioritize your privacy. Before proceeding, we encourage you to read our privacy policy, which outlines the below, and terms of use to understand how we handle your data:
For more information, please read our terms of use and our privacy policy.
