SEBI Approves Changes in IPO Norms - All You Need To Know

The Securities and Exchange Board of India approved the new IPO norms with effect from June 21, 2018. Now IPO price band can be announced two working days before subscription of the offer. Currently the time frame is before 5 days and SEBI changed it to 2 days.

"The requirement of announcing price band five working days before opening of the issue would be reduced to two working days before opening of the issue," said the SEBI.

Apart from the norm change for price band; SEBI has announced other norms listed below

  1. The financial disclosure need to made for 3 years which is currently requirement is 5 years.
  2. The offer documents should be made on consolidated financial disclosures only.
  3. Threshold for submission of draft letter of offer to SEBI in case of rights issues to be increased to Rs 10 crore earlier it was Rs 50 lakh - As per the release.
  4. The Buy Back period has been defined as the period between board of directors resolution/date of declaration of results for special resolution authorizing the buyback of shares and the date on which payment consideration is made to the shareholders. 
  5. Shortfall of up to 10% in minimum promoters’ contribution may be met by institutional investors such as by foreign venture capital investors, scheduled commercial banks, public financial institutions and insurance companies registered with Insurance Regulatory and Development Authority of India, in addition to Alternative Investment Funds, without being identified as Promoters.
  6. For a company to be eligible to make a fast track rights issue, it should not have any audit qualifications or adverse opinion.
  7. For SME IPO - Minimum Anchor investor size to be reduced to Rs. 2 Crore from the existing Rs. 10 Crore.
You can find the details on Sebi Website Click Here

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