SEBI amends DIP Guidelines

SEBI vide its Circular SEBI/CFD/DIL/DIP/36/2009/09/07 dated July 9,2009 has amended the SEBI (Disclosure and Investor Protection) Guidelines, 2000. These amendments give effect to important decisions taken by the SEBI Board on June 18, 2009, including the introduction of 'Anchor Investor' in public issue. The key amendments are summarised below: -

1. An unlisted company making an IPO should compulsorily list its securities on at least one stock exchange having nationwide trading terminals (i.e. BSE or NSE)
2. Concept of 'Anchor Investor' is introduced in public issues through book building. Keys points in relation to 'Anchor Investor' concept are as follows: -  

• 30% of QIP reservation may be allocated to Anchor Investors
• The minimum application size - Rs.10 crores. 25 % payable on application – balance within 2 day of closure of issue
• If price determined in IPO is greater than the price paid by AI, AI will be required to pay the difference to the company
• One-third of the Anchor Investor portion shall be reserved for domestic mutual funds
• Bidding for to open one day before the issue opens and shall be completed on the same day.
• Allocation to Anchor Investors - minimum 2 investors for upto Rs.250 crs. and 5 for more than Rs.250 crores
• Shares shall be in a lock-in of 30 days from the date of allotment in the public issue

A copy of the Circular is available here.

A copy of the amended SEBI (Disclosure and Investor Protection) Guidelines, 2000 is available here.

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Amended DIP guidelines now available for download

SEBI has made available DIP guidelines (amended up to December 8, 2008) for download in its website www.sebi.gov.in. 

Amendments to SEBI (DIP) Guidelines - Now listed companies can offer Non-Convertible Debentures (NCDs) with warrants

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.