SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) (FOURTH AMENDMENT) REGULATIONS, 2021
SEBI vide its notification dated October 26, 2021, amends the provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“ICDR Regulation”), which shall come into force on the date of their publication in the Official Gazette.
As per the amendment, it has been provided that if an issuer has issued SR equity shares to its promoters/ founders, the said issuer shall be allowed to do an initial public offer of only ordinary shares for listing on the Main Board subject to compliance of various clauses which, inter alia, provides that the net worth of the SR shareholder, as determined by a Registered Valuer, shall not be more than rupees one thousand crore.
[As per Regulation 2 (eeea) of ICDR Regulation “SR equity shares” means the equity shares of an issuer having superior voting rights compared to all other equity shares issued by that issuer]
While determining the individual net worth of the SR shareholder, his investment/ shareholding in other listed companies shall be considered but not that of his shareholding in the issuer company. In addition, it has been provided that the SR equity shares have been issued prior to the filing of draft red herring prospectus and held for a period of at least three months prior to the filing of the red herring prospectus.
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