The Securities and Exchange Board of India (SEBI) has introduced amendments to the SEBI (Issue of Capital and Disclosure Requirements) Regulation 2018, aimed at streamlining processes for companies preparing for Initial Public Offerings (IPOs) or fundraising.
Key changes include the elimination of the 1% security deposit requirement for public/rights offerings of equity shares. Additionally, equity shares resulting from the conversion of securities held for at least 12 months prior to the filing of the Draft Red Herring Prospectus (DRHP) will count towards meeting minimum promoters’ contribution (MPC) requirements.
Furthermore, SEBI has allowed flexibility in extending bid/offer closing dates by one day in case of force majeure events, compared to the previous mandate of three days.
SEBI has been actively exploring modernization of IPO processes, including the use of artificial intelligence (AI) for initial scrutiny of DRHPs. The regulator has also warned investors about potential frauds, identifying numerous fake entities claiming to provide stock market access without official Know Your Customer (KYC) verification, posing risks to unsuspecting investors.
