Relaxation in respect of Rights Issue under ICDR Regulations, 2018: COVID-19

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a) The Security and Exchange Board of India (SEBI), on Tuesday, relaxed Issue of Capital and Disclosure Requirements (ICDR) Regulations, 2018 in respect of Rights Issue.

b) The Board issued a circular under Section 11(1) of the Securities and Exchange Board of India Act, 1992, which pertained to certain provisions of the SEBI (ICDR) Regulations, 2018 in respect of Rights Issue, addressing all the Recognized Stock Exchanges and all Registered Merchant Bankers.

c) These temporary relaxations are applicable for Right Issues that open on or before March 31, 2021 and the relaxations mentioned in this circular are not applicable for issuance of warrants.

d) These relaxations will come into effect immediately.

The board said-

“in the wake of developments relating to the COVID-19 pandemic, a number of suggestions have been received by SEBI from industry bodies and market participants for easing of conditions relating to raising of funds from the securities market.”

“This circular shall come into force with immediate effect. The Stock Exchanges are advised to bring the provisions of this circular to the notice of all entities who have listed their equity and convertible securities,” the circular said.

e) The relaxation included relaxations with respect to the eligibility conditions related to Fast Track Rights Issues, relaxation with respect to Minimum Subscription and Relaxation with respect to the minimum threshold required for not filing a draft letter of offer with SEBI.

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