SEBI has amended SEBI (DIP) Guidelines vide its circular dated December 8, 2008. The amendments are made in “Guidelines for Qualified Institutions Placement (QIP)”. It enables a listed company to make a combined offering of Non-Convertible Debentures (NCDs) with warrants. Qualified Institutional Buyers (QIBs) can subscribe to the combined offering of NCDs with warrants or to the individual instruments, i.e., either NCDs or warrants.
Usually, a holder of NCD with equity warrants is given an option to buy a specific number of shares from the company at a predetermined price within a definite time-frame.
The amended clause reads as follows: -
“13A.1.1 This Chapter shall apply to any issue of equity shares / fully convertible debentures (FCDs) / partly convertible debentures (PCDs) (/ nonconvertible debentures (NCDs) with warrants or any securities (other than warrants)), which are convertible into or exchangeable with equity shares at a later date (hereinafter referred to as “specified securities”), made to Qualified Institutional Buyers (QIBs) pursuant to this chapter, by a listed company which fulfills the following conditions:”
Full text of the circular is available in www.sebi.gov.in.
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