SEBI (Issue of Capital & Disclosure

Requirement) Regulation,2009

Arrangement of Regulation

Gaurav Anand
B S B Vamsi Krishna
Darshita Gupta
BACKGROUND
⚫ Reasons for Establishment of SEBI:
⚫ With the growth in the dealings of stock markets, lot of malpractices
also started in stock markets such as price rigging, ‘unofficial premium
on new issue, and delay in delivery of shares, violation of rules and
regulations of stock exchange and listing requirements. Due to these
malpractices the customers started losing confidence and faith in the
stock exchange. So government of India decided to set up an agency
or regulatory body known as Securities Exchange Board of India
(SEBI).

Securities and Exchange Board of India (SEBI) was first established in

the year 1988 as a non-statutory body for regulating the, securities
market. It was made an autonomous body by The Government of
India on 12 April 1992 and given statutory powers in 1992
under SEBI Act 1992 being passed by the Indian Parliament.
⚫ The Securities and Exchange Board of India Act, 1992 (the SEBI
Act) is an Act of the Parliament of India enacted for regulation and
development of securities market in India. It was amended in the years
1995, 1999 and 2002 to meet the requirements of changing needs of
the securities market.
Terminologies
⚫ Anchor Investor-a qualified institutional buyer which makes an
application for a value of 10 crores rupees or more in public issue
through book building process.
⚫ Application Supported by locked Amount(ASBA)-Application for
subscribing o a public issue along with an authorization to self
certified syndicate bank to block the application money in bank
account.
⚫ Book Building-A process undertaken to elite demand and to access
the price for determination of quantum of specified securities.
⚫ Green shoe option-An option of allotting an equity shares in
excess of the equity share offered in the public issue as a post
listing price mechanism.
⚫ Rights Issue- An offer of specified security by listed issuer to the
shareholder of the issuers on the record date fixed for the said
purpose.
Stabilising agent-A merchant banker who is responsible for
stablising the price of an equity share under green shoe option as
per SEBI regulation.
Applicability of the regulation
⚫ The regulations shall apply to the following-
1.A public issuer
2.A right issue when the aggregate value of the security offered is
fifty lakh rupees or more.
3.A preferencial issue.
4. A issue of bonus share by listed issuer;
5.An issue of indian depository receipt;
COMMON CONDITIONS FOR PUBLIC ISSUES AND
RIGHTS ISSUES
⚫ General conditions.
1.No issuer shall make a public issue or rights issue of specified securities:
a) if the issuer, any of its promoters, promoter group or directors or persons in control of the
issuer are debarred from accessing the capital market by the Board.
b) if any of the promoters, directors or persons in control of the issuer was or also is a
promoter, director or person in control of any other company which is debarred from
accessing the capital market under any order or directions made by the Board.
c) unless it has made an application to one or more recognised stock exchanges for listing of
specified securities on such stock exchanges and has chosen one of them as the designated
stock exchange.
d) Provided that in case of an initial public offer, the issuer shall make an application for listing
of the specified securities in at least one recognised stock exchange having nationwide
trading terminals.
e) unless it has entered into an agreement with a depository for dematerialisation of specified
securities already issued or proposed to be issued.
f) unless firm arrangements of finance through verifiable means towards seventy five per cent.
of the stated means of finance, excluding the amount to be raised through the proposed
public issue or rights issue or through existing identifiable internal accruals, have been
made.
Continued
2. Warrants may be issued along with public issue or rights issue of specified securities
subject to the following:
a) he tenure of such warrants shall not exceed 24 months from their date of allotment
in the public/rights issue,
b) the price or conversion formula of the warrants shall be determined upfront and at
least 25% of the consideration amount shall also be received upfront;
3. The amount for general corporate purposes, as mentioned in objects of the issue in
the draft offer document filed with the Board, shall not exceed twenty five per cent
of the amount raised by the issuer by issuance of specified securities;
4. No issuer shall make a public issue of equity securities, if the issuer or any of its
promoters or directors is a wilful defaulter;
5. An issuer making a rights issue of specified securities, shall make disclosures as
specified in Part G of Schedule VIII, in the offer document and abridged letter of
offer, if the issuer or any of its promoters or directors is a wilful defaulter.
6.In case of a rights issue of specified securities, the promoters or promoter group of
the issuer, shall not renounce their rights except to the extent of renunciation
within the promoter group.
⚫ .
 Appointment of merchant banker and other
intermediaries
⚫ The issuer shall appoint one or more merchant bankers, at least one of whom shall
be a lead merchant banker and shall also appoint other intermediaries, in
consultation with the lead merchant banker, to carry out the obligations relating to
the issue;
⚫ Where the issue is managed by more than one merchant banker, the rights,
obligations and responsibilities, relating to disclosures, allotment, refund and
underwriting obligations, if any, of each merchant banker shall be predetermined
and disclosed in the offer document;
⚫ The issuer shall appoint a registrar which has connectivity with all the depositories:
a) Provided that if issuer itself is a registrar to an issue registered with the Board,
the another registrar to an issue shall be appointed as registrar to the issue:
b) Provided further that the lead merchant banker shall not act as a registrar to the
issue in which it is also handling the post issue responsibilities.
 Filing of offer document
⚫ No issuer shall make a public issue or a rights issue, where the aggregate value of the specified
securities offered is fifty lakh rupees or more, unless a draft offer document, along with fees as
specified in Schedule IV has been filed with the Board through the lead merchant banker, at
least thirty days prior to registering the prospectus, red herring prospectus or shelf prospectus
with the Registrar of Companies or filing the letter of offer with the designated stock exchange,
as the case may be.
⚫ The Board may specify changes or issue observations, if any, on the draft offer document within thirty
days from the later of the following dates:
a)the date of receipt of the draft offer document under sub-regulation or
b) the date of receipt of satisfactory reply from the lead merchant bankers, where the Board has
sought any clarification or additional information from them; or
c) the date of receipt of clarification or information from any regulator or agency, where the Board has
sought any clarification or information from such regulator or agency; or
d)the date of receipt of a copy of in principle approval letter issued by the recognised stock
exchanges.
⚫ If e Board specifies changes or issues observations on the draft offer document, the issuer and lead
merchant banker shall carry out such changes in the draft offer document and comply with the
observations issued by the Board before registering the prospectus, red herring prospectus or shelf
prospectus, as the case may be, with the Registrar of Companies or filing the letter of offer with the
designated stock exchange.
⚫ The lead merchant banker shall, while filing the offer document with the Board a copy of such
document with the recognised stock Exchanges where the specified securities are proposed to be
listed
 Security Deposit
⚫ The issuer shall deposit, before the opening of subscription list, and keep deposited with
the stock exchange(s) an amount calculated at the rate of one per cent. of the amount
of securities offered for subscription to the public.
Documents to be submitted before opening of the issue
⚫ The lead merchant bankers shall submit the following to the Board along with the draft
offer document;
a) a certificate, confirming that an agreement has been entered into between the issuer
and the lead merchant bankers;
b) a due diligence certificate;
c) In case of an issue of convertible debt instruments, a due diligence certificate from the
debenture trustee;
⚫ The lead merchant bankers shall submit the following documents to the Board after
issuance of observations by the Board;
a) a statement certifying that all changes, suggestions and observations made by the Board
have been incorporated in the offer document;
c) a copy of the resolution passed by the board of directors of the issuer for allotting
specified securities to promoters towards amount received against promoters‘
contribution, before opening of the issue;
d) a certificate from a Chartered Accountant, before opening of the issue, certifying that
promoters‘ contribution has been received in accordance with these regulations,
accompanying therewith the names and addresses of the promoters who have contributed
to the promoters‘ contribution and the amount paid by each of them towards such
contribution;
 Continued
e) a due diligence certificate,immediately before the opening of the issue, certifying
that necessary corrective action, if any, has been taken;
f) a due diligence certificate after the issue has opened but before it closes for
subscription.
 Draft offer document to be made public
⚫ The draft offer document filed with the Board shall be made public, for comments, if any
for a period of at least twenty one days from the date of such filing, by hosting it on the
websites of the Board, recognised stock exchanges where specified securities are proposed
to be listed and merchant bankers associated with the issue;

⚫ The issuer either on the date of filing the draft offer document with the Board or on the
next day shall make a public announcement in one English national daily newspaper with
wide circulation, one Hindi national daily newspaper with wide circulation and one regional
language newspaper with wide circulation at the place where the registered office of the
issuer is situated, disclosing to the public the fact of filing of draft offer document with the
Board and inviting the public to give their comments to the Board in respect of disclosures
made in the draft offer document.
 Fast Track Issue
⚫ Nothing contained in sub regulations and regulations shall apply to a public issue or
rights issue if the issuer satisfies the following conditions:
a) the equity shares of the issuer have been listed on any recognised stock exchang
having nationwide trading terminals for a period of at least three years immediately
preceding the reference date’
b) the average market capitalisation of public shareholding of the issuer is at least
(one thousand crore rupees in case of public issue and two hundred and fifty crore
rupees in case of rights issue);
c) the annualised trading turnover of the equity shares of the issuer during six
calendar months immediately preceding the month of the reference date has been
at least two percent of the weighted average number of equity shares listed during
such six months period;
d) the issuer has redressed at least ninety five per cent. of the complaints received
from the investors till the end of the quarter immediately preceding the month of
the reference date;
e) the issuer has been in compliance with the equity listing agreement for a period
of at least three years immediately preceding the reference date:
 Continued
f) the impact of auditors‘ qualifications, if any, on the audited accounts of the issuer
in respect of those financial years for which such accounts are disclosed in the offer
document does not exceed five per cent. of the net profit or loss after tax of the
issuer for the respective years ;
g) no show cause notices have been issued or prosecution proceedings initiated by
the Board or pending against the issuer or its promoters or whole time directors
as on the reference date;
h) the entire shareholding of the promoter group of the issuer is held in
dematerialised form on the reference date;
i) in case of a rights issue, promoters and promoter group shall mandatorily
subscribe to their rights entitlement and shall not renounce their rights, except to
the extent of renunciation within the promoter group or for the purpose of
complying with minimum public shareholding norms prescribed under Rule 19A of
the Securities Contracts (Regulation) Rules, 1957;
j) the annualized delivery based trading turnover of the equity shares during six
calendar months immediately preceding the month of the reference date has been
at least ten per cent of the weighted average number of equity shares listed during
such six months‘ period.
 Continued

⚫ The lead merchant bankers shall submit to the Board, the following documents along
with the offer document;
a) in case of a fast track issue of convertible debt instruments a due diligence certificate
from the debenture trustee;
⚫ average market capitalisation of public shareholdingǁ means the sum of daily market
capitalisation of public shareholding for a period of one year up to the end of the quarter
preceding the month in which the proposed issue was approved by the shareholders or
the board of the issuer, as the case may be, divided by the number of trading days.
 Opening of an issue
⚫ Subject to the compliance with Sub section (4) of section 60 of the Companies Act,
1956, a public issue or rights issue may be opened:
a) within twelve months from the date of issuance of the observations by the Board
under regulation 6; or;
b) within three months of expiry of the period, if the Board has not issued observations:
⚫ In case of shelf prospectus, the first issue may be opened within three months of issuance
of observations by the Boar;
⚫ The issuer shall, before registering the red herring prospectus (in case of a book built
issue) or prospectus (in case of a fixed price issue) with the Registrar of Companies or
filing the letter of offer with the designated stock exchange, as the case may be file with
the Board through the lead merchant bankers, an updated offer document highlighting all
changes made in the offer document;
⚫ Notwithstanding anything contained in this regulation, if there are changes in the offer
document in relation to the matters specified, the updated offer document or new draft
offer document, as the case may be, shall be filed with the Board along with fee specifie.
 Dispatch of issue material
⚫ The lead merchant bankers shall dispatch the offer document and other issue
material including forms for ASBA to the designated stock exchange,
syndicate members, registrar to issue and share transfer agents, depository
participants, stock brokers, underwriters, bankers to the issue, investors‘
associations and Self Certified Syndicate Banks in advance.
Underwriting
13. (1) Where the issuer making a public issue (other than through
the book building process) or rights issue, desires to have the issue
underwritten, it shall appoint the underwriters in accordance
with Securities and Exchange Board of India (Underwriters)
Regulations, 1993.
(2) Where the issuer makes a public issue through the book building
process, such issue shall be underwritten by book runners or syndicate
members:
(3) The issuer shall enter into underwriting agreement with the book
runner, who in turn shall enter into underwriting agreement with
syndicate members, indicating therein the number of specified
securities which they shall subscribe to at the predetermined price in
the event of under subscription in the issue.
(4) If syndicate members fail to fulfil their underwriting obligations, the
lead book runner shall fulfil the underwriting obligations.
(5)The book runners and syndicate members shall not subscribe to the
issue in any manner except for fulfilling their underwriting obligations.
Continued.....
(7) In case of every underwritten issue, the lead merchant banker or the
lead book runner shall undertake minimum underwriting obligations
as specified in the Securities and Exchange Board of India (Merchant
Bankers) Regulations, 1992
(8) Where hundred per cent. of the offer through offer document is
underwritten, the underwriting obligations shall be for the entire
hundred per cent. of the offer through offer document and shall not be
restricted up to the minimum subscription level.
Minimum subscription.
14. (1)The minimum subscription to be received in an issue shall
not be less than ninety per cent of the offer through offer
document.

(2) In the event of non receipt of minimum subscription referred

to in sub Regulation (1), all application moneys received shall be
refunded to the applicants forthwith, but not later than:
(a) fifteen days of the closure of the issue, in case of a non
underwritten issue; and
(b) seventy days of the closure of the issue, in the case of an
underwritten issue where minimum subscription including
devolvement obligations paid by the underwriters is not received
within sixty days of the closure of the issue.

(3) The offer document shall contain adequate disclosures

regarding minimum subscription as specified in Part A of
Schedule VIII
Oversubscription.
15 . No allotment shall be made by the issuer in excess of the specified
securities offered through the offer document:
Provided that in case of oversubscription, an allotment of not more
than ten per cent. of the net offer to public may be made for the
purpose of making allotment in minimum lots.
Monitoring agency.
16. (1) If the issue size excluding the size of offer for sale by selling
shareholders exceeds 100 crore rupees, the issuer shall make
arrangements for the use of proceeds of the issue to be monitored by
a public financial institution or by one of the scheduled commercial
banks named in the offer document as bankers of the issuer:
Provided that nothing contained in this clause shall apply to
an issue of specified securities made by a bank or public financial
institution or an insurance company.
(2) The monitoring agency shall submit its report to the issuer in the
format specified in Schedule IX on a quarterly basis, till at least ninety
five percent of the proceeds of the issue, excluding the proceeds
Continued....

....under offer for sale and amount raised for general

corporate purposes, have been utilized.

(3) The Board of Directors and the management of the

company shall provide their comments on the findings of the
monitoring agency as specified in Schedule IX.

(4) The issuer shall, within forty five days from the end of
each quarter, publically disseminate the report of the
monitoring agency by uploading the same on its website as
well as submitting the same to the stock exchange(s) on
which its equity shares are listed.
Manner of calls.
(17) If the issuer proposes to receive subscription monies in calls, it
shall ensure that the outstanding subscription money is called within
twelve months from the date of allotment in the issue and if any
applicant fails to pay the call money within the said twelve months, the
equity shares on which there are calls in arrear along with the
subscription money already paid on such shares shall be forfeited:

Provided that it shall not be necessary to call the outstanding

subscription money within twelve months, if the issuer has appointed
a monitoring agency in terms of regulation 16
Allotment, refund and
Payment of interest.
18. (1) The issuer and merchant bankers shall ensure that
specified securities are allotted and/or application moneys
are refunded within fifteen days from the date of closure
of the issue.
(2) Where specified securities are not allotted and/or
application moneys are not refunded within the period
stipulated in sub-regulation (1), the issuer shall undertake
to pay interest at such rate and within such time as
disclosed in the offer document.
Restriction on further capital issues.
19. (1) No issuer shall make any further issue of specified
securities in any manner whether by way of public issue, rights
issue, preferential issue, qualified institutions placement, issue of
bonus shares or otherwise:
(a)in case of a fast track issue, during the period between the
date of registering the red herring prospectus (in case of a book
built issue) or prospectus (in case of a fixed price issue) with the
Registrar of Companies or filing the letter of offer with the
designated stock exchange and the listing of the specified securities
offered through the offer document or refund of application
moneys; or
(b) in case of other issues, during the period between the date
of filing the draft offer document with the Board and the listing of
the specified securities offered through the offer document or
refund of application moneys unless full disclosures regarding the
total number of specified securities and amount proposed to be
raised from such further issue are made in such draft offer
document or offer document, as the case may be.
Additional requirements for issue of
convertible debt instruments

20. (1) In addition to other requirements laid down in these

regulations, an issuer making a public issue or rights issue of
convertible debt instruments shall comply with the following
conditions:
(a) it has obtained credit rating from one or more credit
rating agencies;
(b) it has appointed one or more debenture trustees in accordance
with the provisions of section 117B of the Companies Act, 1956
and Securities and Exchange Board of India (Debenture Trustees)
Regulations, 1993;
(c) it has created debenture redemption reserve in accordance
with the provisions of section 117C of the Companies Act, 1956
 continued......
d) if the issuer proposes to create a charge or security on its
assets in respect of secured convertible debt instruments, it
shall ensure that:
(i) such assets are sufficient to discharge the principal
amount at all times;
(ii) such assets are free from any encumbrance;
(iii) where security is already created on such assets in
favour of financial institutions or banks or the issue of
convertible debt instruments is proposed to be secured by
creation of security on a leasehold land, the consent of such
financial institution, bank or lessor for a second or pari passu
charge has been obtained and submitted to the debenture
trustee before the opening of the issue;
(iv) the security/asset cover shall be arrived at after
reduction of the liabilities having a first/prior charge, in case
the convertible debt instruments are secured by a second or
subsequent charge.
(e) The issuer shall redeem the convertible debt instruments in
terms of the offer document
Roll over of non convertible portion of
partly convertible debt instruments.
21. (1) The non-convertible portion of partly convertible debt
instruments issued by a listed issuer, the value of which exceeds fifty
lakh rupees, may be rolled over without change in the interest rate,
subject to compliance with the provisions of section 121 of the
Companies Act, 1956 and the following conditions:
(a) seventy five per cent. of the holders of the convertible debt
instruments of the issuer have, through a resolution, approved the
rollover through postal ballot;
(b) the issuer has, along with the notice for passing the
resolution, sent to all holders of the convertible debt instruments,
an auditors‘ certificate on the cash flow of the issuer and with
comments on the liquidity position of the issuer;
(c) the issuer has undertaken to redeem the non-convertible
portion of the partly convertible debt instruments of all the
holders of the convertible debt instruments who have not agreed
to the resolution;
 Continued....

(d) credit rating has been obtained from at least one credit rating
agency registered with the Board within a period of six months prior
to the due date of redemption and has been communicated to the
holders of the convertible debt instruments, before the roll over;

(2) The creation of fresh security and execution of fresh trust deed
shall not be mandatory if the existing trust deed or the security
documents provide for continuance of the security till redemption
of secured convertible debt instruments;
Provided that whether the issuer is required to create fresh
security and to execute fresh trust deed or not shall be decided by
the debenture trustee.
Conversion of optionally convertible debt
instruments into equity share capital.
22. (1) An issuer shall not convert its optionally convertible debt
instruments into equity shares unless the holders of such convertible
debt instruments have sent their positive consent to the issuer and
non-receipt of reply to any notice sent by the issuer for this purpose
shall not be construed as consent for conversion of any convertible
debt instruments.
(2) Where the value of the convertible portion of any convertible
debt instruments issued by a listed issuer exceeds fifty lakh rupees
and the issuer has not determined the conversion price of such
convertible debt instruments at the time of making the issue, the
holders of such convertible debt instruments shall be given the
option of not converting the convertible portion into equity shares:
Provided that where the upper limit on the price of such
convertible debt instruments and justification thereon is
determined and disclosed to the investors at the time of making
the issue, it shall not be necessary to give such option to the
holders of the convertible debt instruments for converting the
convertible portion into equity share capital within the said upper
limit.
Continued ....

(3) Where an option is to be given to the holders of the convertible

debt instruments in terms of before sub-regulation and if one or
more of such holders do not exercise the option to convert the
instruments into equity share capital at a price determined in the
general meeting of the shareholders, the issuer shall redeem that
part of the instruments within one month from the last date by
which option is to be exercised, at a price which shall not be less
than its face value.
(4) The provision of sub - regulation (3) shall not apply if such
redemption is in terms of the disclosures made in the offer
document.
Issue of convertible debt instruments for
financing.
23. No issuer shall issue convertible debt instruments for
financing replenishment of funds or for providing loan to or for
acquiring shares of any person who is part of the same group or who is
under the same management:
Provided that an issuer may issue fully convertible debt instruments
for these purposes if the period of conversion of such debt
instruments is less than eighteen months from the date of issue of such
debt instruments.
Alteration of rights of holders of specified
securities.
24. No issuer shall alter the terms of specified securities which may
adversely affect the interests of the holders of that specified securities,
except with the consent in writing of the holders of not less than
three-fourths of the specified securities of that class or with the
sanction of a special resolution passed at a meeting of the holders of
the specified securities of that class.
PROVISIONS AS TO PUBLIC ISSUE

PART I -ELIGIBILITY REQUIREMENTS

Reference date.
25. Unless otherwise provided in this Chapter, an issuer making a
public issue shall satisfy the conditions of this Chapter as on the date
of filing draft offer document with the Board and also as on the date
of registering the offer document with the Registrar of Companies.
Conditions for initial public offer.
26. (1)An issuer may make an initial public offer, if :
(a) it has net tangible assets of at least three crore rupees in each of
the preceding three full years (of twelve months each), of which not
more than fifty per cent. are held in monetary assets:
Provided that if more than fifty per cent. of the net tangible assets
are held in
monetary assets, the issuer has made firm commitments to utilise
such excess monetary assets in its business or project;
(b) it has a minimum average pre-tax operating profit of rupees fifteen
crore, calculated on a restated and consolidated basis, during the
three most profitable years out of the immediately preceding five
years.
c) it has a net worth of at least one crore rupees in each of the
preceding three full years .
Continued.....
(d) the aggregate of the proposed issue and all previous issues made
in the same financial year in terms of issue size does not exceed five
times its pre -issue net worth as per the audited balance sheet of the
preceding financial year;
(e) if it has changed its name within the last one year, at least fifty per
cent. of the revenue for the preceding one full year has been earned by
it from the activity indicated by the new name.
(2) An issuer not satisfying the condition stipulated in sub -regulation
(1) may make an initial public offer if the issue is made through the book
-building process and the issuer undertakes to allot, at least seventy five
percent of the net offer to public, to qualified institutional buyers and to
refund full subscription money if it fails to make the said minimum
allotment to qualified institutional buyers.
(3) An issuer may make an initial public offer of convertible debt
instruments without making a prior public issue of its equity shares and
listing thereof.
(4) An issuer shall not make an allotment pursuant to a public issue if
the number of prospective allottees is less than one thousand.
(5) No issuer shall make an initial public offer if there are any
outstanding convertible securities or any other right which would
entitle any person with any option to receive equity share.
Provided that the provisions of this sub - regulation shall not apply
to:
(a) a public issue made during the currency of convertible debt
instruments which were issued through an earlier initial public
offer, if the conversion price of such convertible debt instruments
was determined and disclosed in the prospectus of the earlier
issue of convertible debt instruments;
b) outstanding options granted to employees pursuant to an
employee stock option scheme framed in accordance with the
relevant Guidance Note or Accounting Standards, if any, issued by
the Institute of Chartered Accountants of India in this regard.
63(c) fully paid -up outstanding convertible securities which are
required to be converted on or before the date of filing of the red
herring prospectus
(6) Subject to provisions of the Companies Act, 1956 and these
regulations, equity shares may be offered for sale to public
if such equity shares have been held by the sellers for a period of
at least one year prior to the filing of draft offer document with
the Board in accordance with sub-regulation (1) of regulation 6.
Conditions for further public offer.
27. An issuer may make a further public offer if it satisfies the
conditions specified in clauses (d) and (e) of sub-regulation (1) of
regulation 26 and if it does not satisfy those conditions, it may make
a further public offer if it satisfies the conditions specified in
sub-regulation (2) of regulation 26
PART II

PRICING IN PUBLIC ISSUE

Pricing.
28. (1) An issuer may determine the price of specified securities in
consultation with the lead merchant banker or through the book
building process.
(2) An issuer may determine the coupon rate and conversion price of
convertible debt instruments in consultation with the lead merchant
banker or through the book building process.
(3)The issuer shall undertake the book building process in a manner
specified in Schedule XI.
Differential pricing.
29. An issuer may offer specified securities at different prices,
subject to the following:
(a) retail individual investors or retail individual shareholders or
employees
entitled for reservation made under regulation 42 making an
application for specified securities of value not more than two lakhs
rupees, may be offered specified securities at a price lower than the
price at which net offer is made to other categories of applicants:
Provided that such difference shall not be more than ten per cent.
of the price at which specified securities are offered to other
categories of applic
ants;
(b) in case of a book built issue, the price of the specified securities
offered to an anchor investor shall not be lower than the price
offered to other applicants;
(c) in case of a composite issue, the price of the specified securities
offered in the public issue may be different from the price offered in
rights issue and justification for such price difference shall be given
in the offer document.
Price and price band.
30. (1) The issuer may mention a price or price band in the draft and
floor price or price band in the red herring prospectus and determine
the price at a later date before registering the prospectus with the
Registrar of Companies:
Provided that the prospectus registered with the Registrar of
Companies shall contain only one price or the specific coupon rate, as
the case may be.
(2) The issuer shall announce the floor price or price band at least five
working days before the opening of the bid (in case of an initial public
offer) and at least one working day before the opening of the bid (in case
of a further public offer),
in all the newspapers in which the pre issue advertisement was released.
(3) The announcement referred to in sub - regulation (2) shall contain
relevant financial ratios computed for both upper and lower end of the
price band and also a statement drawing attention of the investors to
the section titled ―basis of issue priceǁ in the prospectus.
(4)The cap on the price band shall be less than or equal to one hundred
and twenty per cent. of the floor price.
(5) The floor price or the final price shall not be less than the face value
of the specified securities.
Face value of equity shares.
31. (1) Subject to the provisions of the Companies Act, 1956, the Act
and these regulations, an issuer making an initial public offer may
determine the face value of the equity shares in the following manner:
(a) if the issue price per equity share is five hundred rupees or more,
the issuer shall have the option to determine the face value at less than
ten rupees per equity share:
Provided that the face value shall not be less than one rupee per equity
share;
(b) if the issue price per equity share is less than five hundred rupees,
the face value of the equity shares shall be ten rupees per equity share:
Provided that nothing contained in this sub -regulation shall apply to
initial public offer made by any government company, statutory
authority or corporation or any special purpose vehicle set up by any of
them, which is engaged in infrastructure sector.
(2) The disclosure about the face value of equity shares (including the
statement about the issue price being ―Xǁ times of the face value) shall
be made in the advertisements, offer documents and application forms
in identical font size as that of issue price or price band.
PART III

PROMOTERS’ CONTRIBUTION
Minimum promoters‘ contribution.
32. (1) The promoters of the issuer shall contribute in the public issue
as follows:
(a) in case of an initial public offer, not less than twenty per cent. of
the post issue capital
Provided that in case the post issue shareholding of the promoters is
less than twenty per cent., alternative investment funds may
contribute for the purpose of meeting the shortfall in minimum
contribution as specified for promoters, subject to a maximum of ten
per cent of the post issue capital.
(b) in case of a further public offer, either to the extent of twenty per
cent. of the proposed issue size or to the extent of twenty per cent.
of the post -
issue capital;
(c) in case of a composite issue, either to the extent of twenty per
cent. of the proposed issue size or to the extent of twenty per cent.
of the post - issue capital excluding the rights issue component.
(2) In case of a public issue or composite issue of convertible securities,
minimum promoters‘ contribution shall be as follows :
(a) the promoters shall contribute twenty per cent. as stipulated in
clauses (a), (b) or (c) of sub - regulation (1), as the case may be, either
by way of equity shares or by way of subscription to the convertible
securities:
Provided that if the price of the equity shares allotted pursuant to
conversion is not pre - determined and not disclosed in the offer
document, the promoters shall contribute only by way of subscription
to the convertible securities being issued in the public issue and shall
undertake in writing to subscribe to the equity shares pursuant to
conversion of such securities.
(b) in case of any issue of convertible securities which are convertible
or exchangeable on different dates and if the promoters‘ contribution is
by way of equity shares (conversion price being pre-determined), such
contribution shall not be at a price lower than the weighted average
price of the equity share capital arising out of conversion of such
securities.
 (c) subject to the provisions of clause (a) and (b) above, in case of
an initial public offer of convertible debt instruments without a prior
public issue of equity shares, the promoters shall bring in a
contribution of at least twenty per cent. of the project cost in the form
of equity shares, subject to contributing at least twenty per cent. of
the issue size from their own funds in the form of equity shares:
Provided that if the project is to be implemented in stages, the
promoters‘ contribution shall be with respect to total equity
participation till the respective stage vis-à-vis the debt raised or
proposed to be raised through the public issue.
(3) In case of a further public offer or composite issue where the
promoters contribute more than the stipulated minimum promoters‘
contribution, the allotment with respect to excess contribution shall be
made at a price determined in terms of the provisions of regulation 76
or the issue price,
whichever is higher.
(4) The promoters shall satisfy the requirements of this regulation at
least one day prior to the date of opening of the issue and the
amount of promoters‘ contribution shall be kept in an escrow
account with a scheduled commercial bank and shall be released to
the issuer along with the release
of the issue proceeds:
Provided that where the promoters‘ contribution has already
been brought in and utilised, the issuer shall give the cash flow
statement disclosing the use of such funds in the offer document;
Provided further that where the minimum promoters‘
contribution is more than one hundred crore rupees, the
promoters shall bring in at least one hundred crore rupees before
the date of opening of the issue and the remaining amount may be
brought on pro -rata basis before the calls are made to public.
Securities ineligible for minimum promoters‘
contribution.
For the computation of minimum promoters‘ contribution, the
following specified securities shall not be eligible:
specified securities acquired during the preceding three years, if they
are:
(I)acquired for consideration other than cash and
revaluation of assets or capitalisation of intangible assets is involved in
such transaction; or
(ii)resulting from a bonus issue by utilisation of revaluation
reserves or unrealised profits of the issuer or from bonus issue against
equity shares which are ineligible for minimum promoters‘ contribution;

specified securities acquired by promoters during the preceding one

year at a price lower than the price at which specified securities are
being offered to public in the initial public offer, provided that
nothing contained in this clause shall apply:
(i) if promoters pay to the issuer, the difference
between the price at which specified securities are offered in the initial
public offer and the price at which the specified securities had been
 (ii)if such specified securities are acquired in
terms of the scheme under sections 391-394 of the Companies
Act, 1956, as approved by a High Court, by promoters in lieu of
business and invested capital that had been in existence for a
period of more than one year prior to such approval
(iii)to an initial public offer by a government
company, statutory authority or corporation or any special
purpose vehicle set up by any of them, which is engaged in
infrastructure sector

► specified securities allotted to promoters during the

preceding one year at a price less than the issue price, against
funds brought in by them during that period, in case of an
issuer formed by conversion of one or more partnership
firms, where the partners of the erstwhile partnership
firms are the promoters of the issuer and there is no change in
the management: Provided that specified securities, allotted to
promoters against capital existing in such firms for a period of
more than one year on a continuous basis, shall be eligible;
► specified securities pledged with any creditor.
► an issuer which does not have any identifiable promoter;
► a further public offer, where the equity shares are not
infrequently traded in a recognised stock exchange for a
period of at least three years and the issuer has a track
record of dividend payment for at least immediately
preceding three years: Provided that where promoters
propose to subscribe to the specified securities offered to
the extent greater than higher of the two options available
in clause (b) of sub-regulation (1) of regulation 32, the
subscription in excess of such percentage shall be made at
a price determined in terms of the provisions of
regulation 76 or the issue price, whichever is higher.
► rights issues.
RESTRICTION ON TRANSFERABILITY
(LOCK-IN) OF PROMOTERS‘
CONTRIBUTION,
► ETCof.lock in and inscription of
Date of commencement
non-transferability.
1. Specified securities held by promoters and persons other than
promoters shall not be transferable (hereinafter referred to as
―lock-in‘) from the date of allotment of the specified securities in the
proposed public issue for the period stipulated.
2. The certificate of specified securities which are subject
to lock-in shall contain the inscription ―non transferable and
the lock-in period and in case such specified securities are
dematerialised, the issuer shall ensure that lock-in is recorded by
the depository.
3. Where the specified securities which are subject to lock-in
are partly paid-up and the amount called-up on such
specified securities is less than the amount called-up on
the specified securities issued to the public, the ―lock-in shall
end only on the expiry of three years after such specified
securities have become pari-passu(at the same rate) with the
specified securities issued to the public
► Lock-in of specified securities held by promoters.
In a public issue, the specified securities held by promoters shall be
locked-in for the period stipulated here under:

(a)minimum promoters‘ contribution shall be locked-in for a period of three

years from the date of commencement of commercial production or date of
allotment in the public issue, whichever is later;
(b)promoters‘ holding in excess of minimum promoters‘ contribution shall be
locked-in for a period of one year provided that excess promoters‘ contribution as
provided in clause (b) of regulation 34 shall not be subject to lock-in.
Explanation: For the purposes of this clause, the expression "date of commencement of
commercial production" means the last date of the month in which commercial
production in a manufacturing company is expected to commence as stated in the offer
document

► Lock-in of specified securities lent to stabilising agent under green shoe option.
The lock-in provisions of shall not apply with respect to the specified securities lent
to stabilising agent for the purpose of green shoe option, during the period
starting from the date of lending of such specified securities and ending on the date
on which they are returned to the lender in terms of sub-regulation (5) or (6) of
regulation 45: Provided that the specified securities shall be locked-in for the
remaining period from the date on which they are returned to the lender.
► Pledge of locked-in specified securities.
Specified securities held by promoters and locked-in may be pledged with
any scheduled commercial bank or public financial institution as collateral security
for loan granted by such bank or institution, subject to the following:
(a)if the specified securities are locked-in in terms of clause (a) of
regulation 36, the loan has been granted by such bank or institution for the
purpose of financing one or more of the objects of the issue and pledge of
specified securities is one of the terms of sanction of the loan;
(b)if the specified securities are locked-in in terms of clause (b) of regulation 36
and the pledge of specified securities is one of the terms of sanction of the loan.

► Transferability of locked-in specified securities.

Subject to the provisions of Securities and Exchange Board of India (Substantial
Acquisition of shares and Takeovers) Regulations, 1997, the specified securities
held by promoters and locked-in as per regulation 36 may be transferred to
another promoter or any person of the promoter group or a new promoter or a
person in control of the issuer and the specified securities held by persons other
than promoters and locked-in as per regulation 37 may be transferred to
any other person holding the specified securities which are locked-in along
with the securities proposed to be transferred: Provided that lock-in on such
specified securities shall continue for the remaining period with the transferee and
such transferee shall not be eligible to transfer them till the lock-in period
stipulated in these regulations has expired
 MINIMUM OFFER TO PUBLIC, RESERVATIONS,
ETC
► Minimum offer to public
[The minimum net offer to the public shall be subject to the provisions of clause (b) of
sub-rule (2) of rule 19 of Securities Contracts (Regulations) Rules, 1957.]
► Reservation on competitive basis.
(1)In case of an issue made through the book building process, the issuer may make
reservation on competitive basis out of the issue size excluding promoters‘ contribution
and net offer to public in favour of the following categories of persons
a) [employees; and in case of a new issuer, persons who are in the permanent and full
time employment of the promoting companies excluding the promoters and an
immediate relative of the promoter of such companies;]
b) shareholders (other than promoters) of: (i)listed promoting companies, in case of a
new issuer; and (ii)listed group companies, in case of an existing issuer: Provided
that if the promoting companies are designated financial institutions or state
and central financial institutions, the shareholders of such promoting companies
shall not be eligible for the reservation on competitive basis;
c) persons who, as on the date of filing the draft offer document with the
Board, are associated with the issuer as depositors, bondholders or subscribers
to services of the issuer making an initial public offer: Provided that the issuer
shall not make the reservation to the issue management team, syndicate
members, their promoters, directors and employees and for the group or
associate companies of the issue management team and syndicate members
and their promoters, directors and employees
(2) In case of an issue made other than through the book building process,
the issuer may make reservation on competitive basis out of the issue size
excluding promoters‘ contribution and net offer to public in favour of the following
categories of persons:
a) employees; and in case of a new issuer, persons who are in the
permanent and full time employment of the promoting companies excluding
the promoters and an immediate relative of the promoter of such companies;
b) shareholders of: (i)listed promoting companies, in the case of a new issuer; and
(ii)listed group companies, in the case of an existing issuer.

(3) In case of a further public offer, the issuer may make reservation on competitive
basis out of the issue size excluding promoters’ contribution and net offer to
public in favour of retail individual shareholders of the issuer.

(4) The reservation on competitive basis shall be subject to following conditions:

• the aggregate of reservations for employees shall not exceed five percent
of the post issue capital of the issuer
• reservation for shareholders shall not exceed ten per cent of the issue size
• reservation for persons who as on the date of filing the draft offer document
with the Board, have business association as depositors, bondholders and
subscribers to services with the issuer making an initial public offer shall not
exceed five per cent. of the issue size;
• no further application for subscription in the net offer to public category shall
be entertained from any person (except an employee and retail individual
shareholder) in favour of whom reservation on competitive basis is made;
• any unsubscribed portion in any reserved category may be added to any
other reserved category and the unsubscribed portion, if any, after such
inter-se adjustments among the reserved categories shall be added to the
net offer to the public category
• in case of under-subscription in the net offer to the public category, spill-over
to the extent of under-subscription shall be permitted from the reserved
category to the net public offer category;
• [value of allotment to any employee in pursuance of reservation made
under sub-regulations (1) or (2), as the case may be, shall not exceed [two
lakhs] rupees.

(5)In the case of reserved categories, a single applicant in the reserved

category may make an application for a number of specified securities which
exceeds the reservation
 Allocation in net offer to public.
(1)No person shall make an application in the net offer to public category for
that number of specified securities which exceeds the number of specified securities
offered to public.
(2)In an issue made through the book building process under sub-regulation (1) of
regulation 26, the allocation in the net offer to public category shall be as follows:
(a) not less than thirty five per cent to retail individual investors;
(b) not less than fifteen per cent to non-institutional investors;
(c) not more than fifty per cent to qualified institutional buyers, five per cent.
Of which shall be allocated to mutual funds. mutual funds shall be eligible
for allocation under the balance available for qualified institutional buyer
(3) In an issue made through the book building process under sub-regulation (2) of
regulation 26, the allocation in the net offer to public category shall be as follows:
(a) not more than ten per cent to retail individual investors;
(b) not more than fifteen per cent to non-institutional investors;
(c) not less than seventy five per cent to qualified institutional buyers,
five per cent. of which shall be allocated to mutual funds
 Allocation in net offer to public.
(1)No person shall make an application in the net offer to public category for
that number of specified securities which exceeds the number of specified securities
offered to public.
(2)In an issue made through the book building process under sub-regulation (1) of
regulation 26, the allocation in the net offer to public category shall be as follows:
(a) not less than thirty five per cent to retail individual investors;
(b) not less than fifteen per cent to non-institutional investors;
(c) not more than fifty per cent to qualified institutional buyers, five per cent.
Of which shall be allocated to mutual funds. mutual funds shall be eligible
for allocation under the balance available for qualified institutional buyer
(3) In an issue made through the book building process under sub-regulation (2) of
regulation 26, the allocation in the net offer to public category shall be as follows:
(a) not more than ten per cent to retail individual investors;
(b) not more than fifteen per cent to non-institutional investors;
(c) not less than seventy five per cent to qualified institutional buyers,
five per cent. of which shall be allocated to mutual funds
(4)In an issue made through the book building process, the
issuer may allocate upto [sixty]per cent of the portion
available for allocation to qualified institutional buyers to an
anchor investor

(5)In an issue made other than through the book building

process, allocation in the net offer to public category shall be
made as follows:
a) minimum fifty per cent to retail individual investors; and
b) remaining to:(I)individual applicants other than retail
individual investors; and (ii)other investors including
corporate bodies or institutions, irrespective of the number
of specified securities applied for;
c) the unsubscribed portion in either of the categories
specified in clauses (a) or (b) may be allocated to
applicants in the other categories
Price stabilisation through green
shoe option
► An issuer making a public issue of specified securities may provide green
shoe option for stabilising the post listing price of its specified securities, subject
to the following:
a) the issuer has been authorized, by a resolution passed in the general meeting
of shareholders approving the public issue, to allot specified securities to the
stabilising agent, if required, on the expiry of the stabilisation period;
b) the issuer has appointed a merchant banker or book runner, as the case may
be, from amongst the merchant bankers appointed by the issuer as a stabilising
agent, who shall be responsible for the price stabilisation process;
c) prior to filing the draft offer document with the Board, the issuer and the stabilising
agent have entered into an agreement, stating all the terms and conditions relating
to the green shoe option including fees charged and expenses to be incurred by the
stabilising agent for discharging his responsibilities;
d) prior to filing the offer document with the Board, the stabilising agent has entered
into an agreement with the promoters or pre-issue shareholders or both for
borrowing specified securities, specifying therein the maximum number of specified
securities that may be borrowed for the purpose of allotment or allocation of
specified securities in excess of the issue size, which shall not be in excess of
fifteen per cent. of the issue size;
g) in case of an IPO pre-issue shareholders and promoters and in case of a further public
offer pre-issue shareholders holding more than five percent specified securities and
promoters, may lend specified securities to the extent of the proposed over-allotment;
h) the specified securities borrowed shall be in dematerialised form and allocation of these
securities shall be made pro-rata to all successful applicants.

► For the purpose of stabilisation of post-listing price of the specified securities, the
stabilising agent shall determine the relevant aspects including the timing of buying
such securities, quantity to be bought and the price at which such securities are to be
bought from the market.
► The stabilisation process shall be available for a period not exceeding 30 days from the
date on which trading permission is given by the recognised stock exchanges in respect
of the specified securities allotted in the public issue.
► The stabilising agent shall open a special account, distinct from the issue account, with a
bank for crediting the money received from the applicants against the over-allotment and
a special account with a depository participant for crediting specified securities to
be bought from the market during the stabilisation period out of the monies credited
in the special bank account.
► The specified securities bought from the market and credited in the special
account with the depository participant shall be returned to the promoters or pre-issue
shareholders immediately, in any case not later than two working days after the end of
the stabilization period.
► On expiry of the stabilisation period, if the stabilising agent has not been able to
buy specified securities from the market to the extent of such securities over-allotted,
the issuer shall allot specified securities at issue price in dematerialised form to the
extent of the shortfall to the special account with the depository participant, within five
days of the closure of the stabilisation period and such specified securities shall be
returned to the promoters or pre-issue shareholders by the stabilising agent in lieu of the
specified securities borrowed from them and the account with the depository
participant shall be closed thereafter.
► The stabilising agent shall remit the monies with respect to the specified
securities allotted under sub-regulation (6) to the issuer from the special bank
account.
► Any money left in the special bank account after remittance of money
to the issuer under sub-regulation (8) and deduction of expenses incurred by
the stabilising agent for the stabilisation process shall be transferred to the
Investor Protection and Education Fund established by the Board and the
special bank account shall be closed soon thereafter.
► The stabilising agent shall submit a report to the stock exchange on a
daily basis during the stabilisation period and a final report to the Board in
the format specified in Schedule XII.
► The stabilising agent shall maintain a register for a period of at least three
years from the date of the end of the stabilisation period and such register shall
contain the following particulars:
(a)The names of the promoters or pre-issue shareholders from whom
the specified securities were borrowed and the number of specified securities
borrowed from each of them;
(b)The price, date and time in respect of each transaction effected
in the course of the stabilisation process; and
(c)The details of allotment made by the issuer on expiry of the
stabilisation process.
► Period of subscription
(1) a public issue shall be kept open for at least three working days but not
more than ten working days including the days for which the issue is kept open in
case of revision in price band.
(2)In case the price band in a public issue made through the book
building process is revised, the bidding (issue) period disclosed in the red
herring prospectus shall be extended for a minimum period of three working days:
Provided that the total bidding period shall not exceed ten working days.
► Pre-issue advertisement for public issue
(1)Subject to the provisions of section 66 of the Companies Act, 1956,
the issuer shall, after registering the red herring prospectus or prospectus with
the Registrar of Companies, make a pre-issue advertisement in one English
national daily newspaper with wide circulation, Hindi national daily
newspaper with wide circulation and one regional language newspaper with
wide circulation at the place where the registered office of the issuer is
situated.
(2)The pre-issue advertisement shall be in the format and shall contain the
disclosures specified in Part A of Schedule XIII.
► Issue opening and issue closing advertisement for public issue
An issuer may issue advertisements for issue opening and issue closing
advertisements, which shall be in the formats specified in Parts B and C of
Schedule XIII.
► Minimum application value
(1)The issuer shall stipulate in the offer document, the minimum
application size in terms of number of specified securities which shall fall within
the range of minimum application value of [ten thousand rupees to fifteen
thousand rupees].
(2)The issuer shall invite applications in multiples of the minimum
application value
(3)The minimum sum payable on application shall not be less than
twenty five per cent of the issue price

► Allotment procedure and basis of allotment

(1) The allotment of specified securities to applicants shall be on
proportionate basis within the specified investor categories and the number of
securities allotted shall be rounded off to the nearest integer, subject to
minimum allotment being equal to the minimum application size as determined
and disclosed by the issuer
(2)The executive director or managing director of the designated stock
exchange along with the post issue lead merchant bankers and registrars to the
issue shall ensure that the basis of allotment is finalised in a fair and proper
manner in accordance with the allotment procedure
► Utilisation of subscription money
The post-issue lead merchant banker shall ensure that money
received in respect of the issue are released to the issuer in compliance with the
provisions of section 73 of the Companies Act, 1956
 RIGHTS ISSUE
► Record Date.
(1)A listed issuer making a rights issue shall announce a record date
for the purpose of determining the shareholders eligible to apply for specified
securities in the proposed rights issue.
(2)The issuer shall not withdraw rights issue after announcement of the
record date.
(3)If the issuer withdraws the rights issue after announcing the record
date, it shall not make an application for listing of any of its specified securities on
any recognised stock exchange for a period of twelve months from the record date
announced
► Restriction on rights issue
(1) No issuer shall make a rights issue of equity shares unless it has made
reservation of equity shares of The same class in favour of the holders of
outstanding convertible debt instruments in proportion to the convertible part
thereof
(2)The equity shares reserved for the holders of fully or partially
convertible debt instruments shall be issued at the time of conversion of such
convertible debt instruments on the same terms at which the equity shares offered
in the rights issue were issued
► Letter of offer, abridged letter of offer, pricing and period of subscription
(1)The abridged letter of offer, along with application form, shall be
dispatched through registered post or speed post to all the existing shareholders at
least three days before the date of opening of the issue: Provided that the letter of
offer shall be given by the issuer or lead merchant banker to any existing
shareholder who has made a request in this regard.
(2)The shareholders who have not received the application form may
apply in writing on a plain paper, along with the requisite application money.
(3)The shareholders making application otherwise than on the application
form shall not renounce their rights and shall not utilise the application form for any
purpose including renunciation even if it is received subsequently.
(4)Where any shareholder makes an application on application form as
well as on plain paper, the application is liable to be rejected.
(5)The issue price shall be decided before determining the record date which
shall be determined in consultation with the designated stock exchange.
(6)A rights issue shall be open for subscription for a minimum period
of fifteen days and for a maximum period of thirty days.
► (1)The issuer shall issue an advertisement for rights issue disclosing the
following:
(a) the date of completion of despatch of abridged letter of offer and the
application form;
(b) the centres other than registered office of the issuer where the
shareholders or the persons entitled to receive the rights entitlements may
obtain duplicate copies of the application forms in case they do not receive the
application form within a reasonable time after opening of the rights issue;
(c) a statement that if the shareholders entitled to receive the rights
entitlements have neither received the original application forms nor they are in
a position to obtain the duplicate forms, they may make application in writing on
a plain paper to subscribe to the rights issue;
(d) a format to enable the shareholders entitled to apply against their rights
entitlements, to make the application on a plain paper specifying therein
necessary particulars such as name, address, ratio of rights issue, issue price,
number of equity shares held, ledger folio numbers, depository participant
ID, client ID, number of equity shares entitled and applied for, additional shares
if any, amount to be paid along with application, and particulars of cheque, etc.
to be drawn in favour of the issuer‘s account;
(e) a statement that the applications can be directly sent by the
shareholders entitled to apply against rights entitlements through registered
post together with the application moneys to the issuer's designated official at
the address given in the advertisement;
(f) a statement to the effect that if the shareholder makes an application on
plain paper and also on application form both his applications shall be liable to
be rejected at the option of the issuer.
 (2)The advertisement shall be made in at least one English
national daily newspaper with wide circulation, one Hindi national
daily newspaper with wide circulation and one regional language
daily newspaper with wide circulation at the place where registered
office of the issuer is situated, at least three days before the date of
opening of the issue.

► Reservation for employees along with rights issue.

Subject to other applicable provision of these regulations
the issuer may make reservation for employees along with rights issue
subject to the condition that value of allotment to any employee shall
not exceed two lakhs rupees.

► Utilisation of funds raised in rights issue.

The issuer shall utilise funds collected in rights issues after the
finalisation of the basis of allotment.