Market Regulator SEBI has notified Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2021 which amends the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.

The summary of amended regulations are as follows;

General

In Regulation 282, in sub-regulation (3), the words “Institutional Trading Platform” shall be substituted with the words “Innovators Growth Platform”. ‘Accredited Investor’ rechristened as ‘Innovator Growth Investor Platform’.

Listing of Securities on IGP (Regulation 282)

In Regulation 282 after sub-regulation (3), the new sub-regulation shall be inserted, namely “if an issuer has issued SR equity shares to its promoters/ founders, the said issuer shall be allowed to make an initial public offer of only ordinary shares for listing on the Innovators Growth Platform subject to compliance with the provisions of this Chapter and continued compliance with the provisions for SR equity shares in accordance with sub-regulation (3) of regulation 6”.

Exit from Innovators Growth Platform (Regulation 290)

Under Regulation 290A, the provisions of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009, in respect of the matters not specifically dealt or excluded under this regulation, shall apply mutatis mutandis to delisting of specified securities under these regulations. An issuer company whose specified securities are traded on the Innovators Growth Platform pursuant to an initial public offer may exit from the Innovators Growth Platform, if  such an exit is approved by the board of directors of the company in its meeting; such an exit is approved by the shareholders of the company by a special resolution passed through postal ballot or e-voting, after disclosure of all material facts in the explanatory statement sent to the shareholders in relation to such resolution. Delisting price is based on a floor price determined in terms of regulation 8 of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, as may be applicable, and an additional delisting premium justified by the acquirer / promoter; The post offer acquirer / promoter shareholding (along with the persons acting in concert with the acquirer / promoter), taken together with the shares tendered reaches seventy five per cent of the total issued shares of that class and at least fifty per cent shares of the public shareholders as on date of the meeting referred to in clause (a) of this sub-regulation are tendered and accepted. Recognised stock exchange(s) where its shares are listed approves of such an exit.” in regulations 292, the existing sub-regulation (3) shall be substituted with the following, namely, “A company not satisfying the conditions laid down under sub-regulation (2) of regulation 292, shall, as on date of application for migration under the regular category, have fifty per cent of its capital held by Qualified Institutional Buyers.”

Allocation of the Issue Size (Regulation 287(4))

Issuers can allocate 60% of the issue size to eligible investors under Regulation 283(1) prior to the issue opening at price not lower than offer price to other applicants. Minimum application value Rs. 50 lakhs.

Migration to Main Board (Regulation 292)

An entity applying to migrate to Main Board and not satisfying any conditions laid down in Regulation 292(2) must have 75% of its capital held by Qualified Institutional Buyers.

Lock in for SR Equity Shares

SR Equity Shares shall be locked in till conversion to equity shares with voting rights similar to that of ordinary shares or for a period of 6 months from the date of allotment whichever is later.

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