SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF …AZB & Partners Privileged and confidential...
Transcript of SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF …AZB & Partners Privileged and confidential...
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
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SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND
DISCLOSURE REQUIREMENTS) REGULATIONS, 2018
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The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“ICDR 2018”) have been notified on September
11, 2018 and have been effective since November 10, 2018. Accordingly, the Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009 (“ICDR 2009”) would stand rescinded and repealed by the ICDR 2018.
This Memorandum sets out a snap-shot of the key changes brought by the ICDR 2018 as well as a detailed comparison of the ICDR 2009 vis-à-vis the ICDR
2018. Accordingly, this Memorandum has been segregated into the following segments:
(a) Section I – A snap-shot of the key structural and global changes;
(b) Section II - Key regulatory changes – key points to be noted, if applicable (only in context of public issuances on the main board);
(c) Annex A – A tabular comparison of the provisions of the ICDR 2018 with the provisions of the ICDR 2009; and
(d) Annex B – Comparison of the index/ format of ICDR 2018 with the provisions of the ICDR 2009.
While the ICDR 2018 governs, the process of issuance and listing of securities, inter-alia, through public issuances (on the Main Board as well SME exchange),
rights issues, preferential issuances, QIP and issuance of IDR, this Memorandum primarily focusses on the changes in the ICDR 2018 vis-à-vis public offerings
on the Main Board. For a detailed list of changes, please refer to Annex A.
Glossary of key terms:
(a) AIF – Alternative investment fund
(b) CA – Chartered Accountants
(c) Companies Act – The Companies Act, 2013, as amended
(d) DRHP – Draft Red Herring Prospectus
(e) ESOP – Employee stock option plan
(f) FEO Act - Fugitive Economic Offenders Act, 2018 (17 of 2018)
(g) FPO – Further public offer
(h) FDI – Foreign direct investment
(i) FPI (as used in the summary of the regulations) – Foreign portfolio investor other than Category III foreign portfolio investor
(j) FVCI - Foreign venture capital investors
(k) IDR - Indian Depository Receipts
(l) IPO – Initial public offering of equity shares
(m) IPP – Institutional placement programme
(n) IRDAI - The Insurance Regulatory and Development Authority of India
(o) QIP – Qualified institutions placement
(p) LLP – Limited Liability Partnership
INTRODUCTION AND SCOPE
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(q) LODR Regulations – The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended
(r) Main Board - A recognised stock exchange having nationwide trading terminals, other than SME exchange
(s) MCA – Ministry of Corporate Affairs
(t) NBFC-SI – Systematically important non-banking financial companies
(u) NII – Non-institutional investor
(v) RHP – Red Herring Prospectus
(w) SEBI – Securities and Exchange Board of India
(x) SCRR - Securities Contracts (Regulation) Rules
(y) SBEB Regulations - Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014
(z) SEBI Act – Securities Exchange Board of India Act, 1992, as amended
(aa) OFS – Offer for sale
(bb) PFI - Public financial institution as defined under the Companies Act, 2013
(cc) Public issue/ offer – IPO and/or FPO
(dd) SME – Small and medium enterprises
(ee) QIB – Qualified institutional buyer
(ff) VCF – Venture Capital Fund
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The format of ICDR 2009 has been re-structured in ICDR 2018 to, inter-alia, make the regulations more user friendly and align the regulations with the changes
to other statutes and regulations. While the key structural and global changes in the format of ICDR 2018 (excluding in the schedules) is stated below, we have
set out a detailed comparison of the index of ICDR 2009 and ICDR 2018 as Annex B:
Provisions of IPO on the Main Board, rights issue and FPO have been segregated into different chapters. Accordingly, the common conditions for public
offers and rights issues as existing in ICDR 2009 have been done away with.
ICDR 2009 stated provisions for public issuances (IPOs and FPOs) at one place. However, the ICDR 2018 segregates provisions of the IPOs from FPOs.
Provisions pertaining to IPP have been deleted from ICDR 2018.
Further, certain new terms have been introduced and/or defined in the ICDR 2018, including, lead managers, main board, updated draft red herring
prospectus and fugitive economic offenders.
The ICDR 2018 now requires disclosure of financial information on a consolidated basis for a period of three immediately preceding fiscals in the DRHP/
offer document and stub period.
References to the Companies Act, 1956 have been replaced with the corresponding provisions in the Companies Act, 2013.
The term ‘selling shareholder’ has been introduced in the ICDR 2018.
The promoters and directors of the issuers not being declared as a ‘fugitive economic offender’ has been included as an eligibility requirement for all forms
of issuances provided under the ICDR 2018.
In relation to QIPs, enabling provisions for an offer for sale component in QIPs have been included.
SECTION I – A SNAP-SHOT OF KEY STRUCTURAL AND GLOBAL CHANGES
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PART A – KEY AMENDMENTS TO DEFINITIONS AND CONCEPTS
1. APPLICABILITY OF THE ICDR 2018
(a) Key changes
While the ICDR 2018 specifies the date on which the said regulations would be effective, it does not clarify the applicability on offer documents to
be filed in relation to deals for which DRHPs have already been cleared by SEBI.
Threshold of aggregate value of issue size for rights issues by listed issuers has been increased from Rs. 50 lacs to Rs. 10 crores.
2. DEFINITION OF ‘ASSOCIATE’
(a) Key changes
New definition included in ICDR 2018.
Who is an associate of an issuer? – An entity (not being a subsidiary but including a joint venture company) in which an issuer exercises control of
at least 20 % of total voting power or control of or participation in business decisions under an agreement.
(b) Key points to be noted
The ICDR 2018 provides the definition of associate only in context of an issuer.
Companies Act vis-à-vis ICDR 2018 - The Companies Act defines ‘associate companies’, i.e., the definition applies to companies only (including
joint ventures). However, while the ICDR 2018 refers to the Companies Act in context of the meaning of ‘associate’, the language of the definition
appears to be agnostic to the nature in which an associate is incorporated, i.e., whether such associate is a company or body corporate or firm or
partnership or LLP. Further, while the ICDR defines the term ‘associate’ and the Companies Act defines the term ‘associate companies’, in context
of the disclosures in the offer document it should be discussed whether the two definitions should be read harmoniously in line with the practice
thus far, i.e., to include entities irrespective of the way in which they are incorporated.
Companies Act vis-à-vis Ind-AS - The term ‘Associate’ is also defined under the Accounting Standard (IND AS-28), which is broader than
definition under the Companies Act. Further, under the IND-AS, ‘Significant Influence’ is the power to participate in the financial and operating
policy decisions of the investee, and influence is presumed to be significant if the shareholding threshold reaches 20 %, which is similar to
Companies Act, 2013. Further, on account of the difference between the Companies Act and Ind-AS, there may be a disconnect in the ‘associates’
disclosed under the financial statements vis-à-vis the general disclosures in the other sections of the offer document.
SECTION II – KEY REGULATORY CHANGES (PUBLIC ISSUANCES ON THE MAIN BOARD)
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3. DEFINTION OF EMPLOYEES
(a) Key changes
Definition has been aligned to the Companies (Share Capital and Debenture) Rules, 2014, as amended and SBEB Regulations.
A proviso has been include to distinguish between the definition applicable for general disclosures (ICDR 2018 applies) vis-à-vis the definition for
stock option scheme (SBEB Regulations apply). In this context, it should be noted that, the definition of ‘employee’ under the ICDR 2018 and the
SBEB Regulations has almost been aligned.
Requirement of employees being ‘full-time’ has been deleted.
Scope of the definition has been narrowed vis-à-vis the ICDR 2009 to exclude (i) employees of material associates of the issuer and (ii) directors
who either themselves or through any body corporate, directly or indirectly hold more than 10 % of the issuer’s outstanding equity shares. Further,
the amended definition also includes certain language changes, including, replacing the term ‘immediate relatives of the promoters’ with ‘promoter
group’ and ‘holding company’ with ‘promoter’.
(b) Key points to be noted
While the definition of ‘employees’ under the ICDR 2018 as well as the SBEB Regulations refer to ‘permanent employees’, it should be noted that
Regulations 5(2) (exemption for outstanding stock options from eligibility requirements) and 17 (a) (exemption from one year lock-up) has been
clarified to include employees who are not currently on the pay-roll of the issuer. While this clarification does not have any bearing to the extent
of reservation and pricing, this is a welcome change for extending the benefits of outstanding stock options/ equity shares from such options on
employees who are no longer on the payrolls of the issuer.
While past employees get benefit under the lock-in provisions, the excluded categories will no longer be eligible for employee reservation and
differential pricing.
On account of alignment in the said definition with the one under the SBEB Regulations, i.e., exclusion of employees of associates and directors
holding above 10% of the outstanding equity shares, there should not be a disconnect between employees eligible for employee reservation as well
as employees under the ESOP disclosure.
4. FUGITIVE ECONOMIC OFFENDER – ELIGIBILITY REQUIREMENT FOR ALL FORMS OF ISSUANCES UNDER THE ICDR 2018
(a) Key changes
New inserted definition and corresponding eligibility provisions in light of the FEO Act.
No issuer shall be eligible to make any of the issuances provided for under ICDR 2018 if any of its directors or promoters are declared to be
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fugitive economic offenders.
This eligibility requirements extend only to directors or promoters of the issuer.
(b) Key points to be noted
Eligibility certificate from the issuer and certificates from the directors, promoters and selling shareholders (if applicable) to include undertaking to
this effect. Further, the Offer Agreements should include representations and warranties to this effect.
5. GROUP COMPANIES (IDENTIFICATION AND LITIGATION APPROACH)
(a) Key take away
What are group companies? (i) companies with which the issuer has had related party transactions during the past three fiscals and stub period (as
appearing the audit report and financial statements), and (ii) other companies considered material by the board.
Promoters and subsidiaries have been excluded from the definition.
Related party test is only vis-à-vis the financials disclosed in the offer document, i.e., past three fiscals and stub.
Litigation – The ICDR 2018 segregates the disclosure requirement for litigations of group companies from the general litigation disclosure of the
issuer, promoter, directors and subsidiaries.
What litigations are to be disclosed? – Only such litigations of the group companies which in the judgement of the issuer impacts such issuer
would need to be disclosed.
(b) Key points to be noted
Counsels and lead managers to rely on the related party schedule disclosed in the last three years’ financials and stub period. Transactions between
the dates as on which related party schedule is included in the DRHP and till the date of filing of DRHP, shall also be procured from issuer.
Further, in relation to the materiality test for litigations, discussions would need to be had on a subjective basis with the issuer.
6. ISSUER
(a) Key changes
Definition covers only companies and body corporates and does not include LLPs or funds or firms whether incorporated in or outside India.
This definition clarifies now that a selling shareholder is not to be considered as an ‘issuer’ and that only the entity whose shares are being listed is
to be considered as an ‘issuer’
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7. PROMOTER
(a) Key changes
The definition has been aligned with Section 2(69) of the Companies Act. Accordingly, now the identification of a promoter also has to be based
on the persons identified in the annual return filed by the company.
Threshold for shareholding vis-à-vis certain categories of shareholders has been increased from 10 % to 20 %.
The shareholding linked exemption from being identified as a promoter has been extended to additional categories of investor, i.e., VCFs, AIFs,
FVCIs and insurance companies in addition to financial institution, scheduled commercial bank, foreign portfolio investor other than Category III
foreign portfolio investor, mutual fund (who shall not be deemed to be promoters merely because they hold 20% or more in the issuer).
Consequential changes have been made in various provisions, including, the definition of promoter group.
.
Persons instrumental in formulation of a plan or programme of the offer as promoter has now been removed.
Proviso under the ICDR 2009 in relation to a financial institution, scheduled commercial bank, foreign portfolio investor other than Category III
foreign portfolio investor and mutual funds continuing to be deemed as promoters of the subsidiaries or companies promoted by them or mutual
funds sponsored by them has been deleted.
(b) Key points to be noted
The proviso to the definition of ‘promoters’ does not carve out other categories of investors under the FDI route.
Since the definition of ‘promoter’ in the ICDR Regulations has been aligned with the provisions of the Companies Act, 2013, as customarily done,
the annual returns of the issuer should be checked to see if any persons in addition to the promoters being identified in the DRHP. Besides this,
other traditional tests have to be done/ questions asked, to correctly determine who is the promoter of the Company.
8. PROMOTER GROUP
(a) Key changes
The threshold vis-à-vis promoter related entities has been increased from 10% to 20% shareholding.
VCFs, AIFs, FVCIs, insurance companies or entities belonging to any other category as specified by SEBI from time to time are exempt from
being identified as a promoter group merely by virtue of the fact that 20% or more of the equity share capital is held by them (except with respect
to such entities’ subsidiaries or companies promoted by them or for the mutual funds sponsored by them). They will need to satisfy the other
conditions prescribed in order to meet the test of a promoter group entity.
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(b) Key points to be noted
While the term ‘relative’ has been used in certain places within the definition instead of ‘immediate relative’, for purpose of Promoter Group
identification, the term relatives should be read as ‘immediate relatives’ in line with the intent on the coverage.
9. QUALIFIED INSTITUTIONS PLACEMENT
(a) Key changes
QIPs can now be undertaken through or include an offer for sale by promoters and / or promoter group as well.
(b) Key points to be noted
Post an IPO, issuers can now meet the minimum dilution requirement as per the SCRR through a QIP as well.
The format and disclosures of a placement documents for QIPs would need to be relooked.
10. SELLING SHAREHOLDERS
(a) Key changes
New definition of ‘selling shareholders’ and corresponding provisions for disclosures and eligibility requirements have been included.
The amendments and inclusions have been made only in context of public issuances (for both Main Board and SME listings), right issues (where
disclosures are made in terms of Part A of Schedule VI) and disclosures in offer documents for issuance of IDRs.
(b) Key points to be noted
Vis-à-vis confirmations from selling shareholders – Considering that the ICDR 2018 states specific requirements for selling shareholders stated
below is the list of confirmations to be obtained from the selling shareholders as has been agreed to amongst certain counsels and bankers:
(i) If the selling shareholders are not prohibited from accessing the capital market or debarred from buying, selling or dealing in securities under
any order or direction passed by SEBI or any securities market regulator in any jurisdiction or any other authority/court.
(ii) Whether the selling shareholder is a wilful defaulter as per the definition in the ICDR 2018.
(iii) Whether the selling shareholder is a fugitive economic offender (applicability on foreign selling shareholder to be assessed).
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(iv) Whether the selling shareholder has committed any securities law violation in any jurisdiction.
(v) Whether the selling shareholder has complied with the Companies (Significant Beneficial Ownership) Rules, 2018 (“SBO Rules”).
Vis-à-vis confirmation under the SBO Rules
(i) For the purpose of making the above confirmation, including vis-à-vis the issuer, counsels to review forms prescribed under SBO Rules, i.e.,
forms BEN 1, BEN 2 and BEN 3.
(ii) It relation to point (i), above, it should be noted that the MCA has extended the timeline for filing of BEN 1, BEN 2 and BEN 3 until further
notice on account of, inter-alia, clarifications sought by market participants, in relation to applicability of the said rules on certain other
categories of pooled investment vehicles/ investment funds. Therefore, if any DRHPs are filed before such notification on timeline for filing of
the said forms is issued by MCA, compliance with the requirement of the ICDR 2018 in relation to confirmation by selling shareholders with
the SBO Rules may be difficult.
(iii) SBO Rules do not apply to the holding of shares of companies/body corporates, in case of pooled investment vehicles/investment funds such as
mutual funds, AIFs, Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) regulated under SEBI Act. Therefore,
these rules may not apply to every selling shareholder. Accordingly, we may have to assess the applicability on a case to case basis vis-à-vis the
documentation on deals.
As per the ICDR Regulations, the term ‘securities law’ has not been used in the context of a main board listing. Further, the securities law
violation in any jurisdiction is not an eligibility requirement vis-à-vis the issuer, promoter, director or promoter group. While there may have been
instances where investors may have provided this undertaking, it may lead to negotiations at their request.
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PART – B – KEY PROCEDURAL AMENDMENTS
1. ELIGIBILITY FOR PUBLIC ISSUES ON THE MAIN BOARD
(a) Key changes
Eligibility requirements for promoters, directors and selling shareholders:
(i) Debarment of selling shareholders from accessing the capital markets has now been made an eligibility condition. This change, however, is
consistent with the market practice.
(ii) Clarified that restriction shall not apply to the person or entities who were debarred in the past and the period of debarment is already over as
on the date of filing of DRHP with SEBI.
(iii) A new criterion of eligibility in relation to promoters and directors of an issuer not being a fugitive economic offender has been included.
Convertibles linked eligibility:
(i) An issuer is eligible to undertake an initial public offer even if there are outstanding options granted to an employees, irrespective of whether
such person is currently an employee or not, pursuant to an employee stock option scheme or the existing outstanding convertible securities
which are required to be converted on or before the date of filing of the RHP (in case of book built issue). Accordingly, the previous practice of
ensuring that options held by past employees have lapsed or are exercised before the filing of the DRHP, is no longer relevant.
Financial information linked eligibility:
(i) Condition of issue size including the previous issues in same fiscal year, not exceeding five times the net worth has been deleted.
(ii) Average operating profits to be calculated on immediately preceding three years and each preceding year shall have operating profits.
(iii) The ICDR 2018clarifies that the net tangible assets, average operating profits, net worth and revenue has to be calculated on a restated and
consolidated basis.
OFS linked eligibility:
(i) It has been clarified that the offer shares arising from convertible instruments can now be converted before filing of RHP.
General conditions of eligibility:
(i) In line with the provisions of Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2018 (notified on September 10,
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2018), the shareholding of the promoters of an issuer shall have to be dematerialized at the DRHP stage.
2. Minimum promoters’ contribution, its eligibility, pledging and certification
(a) Key changes
Who can make the minimum promoters’ contribution? – In addition to the promoters of an issuer, certain regulated entities such as AIF or FVCI
or scheduled commercial banks, or PFIs or insurance companies registered with IRDAI are now permitted to contribute in order to meet the
shortfall in minimum contribution, subject to a limit of 10% of the post issue-capital.
Would the additional categories of shareholders making the minimum promoters’ contribution would be deemed as promoters? - No, subject to the
shareholding linked threshold mentioned in the said definition.
Ineligibility of securities for minimum promoters’ contribution? - Ineligibility conditions have now extended to the securities which are
contributed towards promoters’ contribution by the additional regulated entities identified above, i.e., securities acquired by promoters, AIFs,
FVCIs or scheduled commercial banks or PFIs or insurance companies registered with IRDAI, during the one year at a price lower than the offer
price of the IPO, shall not being eligible for minimum promoters’ contribution.
Pledging – Now the promoters’ contribution and other securities held by the promoters (and locked-in) can also be pledged with NBFC-SI and
housing finance companies.
Effectiveness of lock-in on minimum promoters’ contribution - In line with the ICDR 2009, the ICDR 2018 provides that lock-in on minimum
promoters’ contribution is effective till the later of the date of allotment in the IPO or the date of commencement of commercial production.
However, the definition of the term ‘date of commencement of commercial production’ has been amended to mean the last date of the month in
which commercial production of the ‘project’ in respect of which the IPO proceeds are proposed to be utilized as per the DRHP/ offer documents,
is expected to commence.
Certification for minimum promoters contribution - Statutory auditors and not independent CA, to certify the amount paid as well as credited to
the issuer’s account by each of the promoters.
(b) Key points to be noted
Change in auditor deliverables to include the certificate on promoters’ contribution. Further, discussions with auditors should be held to obtain
certification instead of agreed upon procedures.
3. Face value of equity shares
(a) Key changes
No specific mechanism or requirement for determining the face-value of equity shares of the issuer.
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4. Price and price band
(a) Key changes
Timeline for announcement of floor price/ price band has been reduced from at least 5 working days before the opening bid to at least 2 working
days before the issue.
(b) Key points to be noted
Workings and timelines for the price band, including, deliverable timelines from the ad-agency for the floor price/ price band advertisement and
other related points to be worked around the revised timeline.
5. Underwriting
(a) Key changes
Scope of underwriting obligation: Now the scope of the underwriting obligation is for at least 90 % of the offer through the offer document.
Therefore, underwriting can be done only to the extent of minimum subscription for pure fresh issue and to the extent of meeting the public float
requirements, i.e., 10% or 25% in pure OFS. Accordingly, underwriters can limit their obligation to the extent of minimum subscription.
(b) Key points to be noted
Underwriting obligation only to ensure that the IPO is not a failure.
If OFS shares are not subscribed in addition to the unsubscribed fresh issue shares, such shares would be transferred back to the sellers.
6. Reservation on competitive basis
(a) Key changes
Reservation can be made: For employees (as defined under the ICDR 2018) and shareholders (other than the promoters and promoter group) of
listed subsidiaries or listed promoter companies.
Reservation excludes: New provision excludes, promoter group in addition to promoters, shareholders of listed group companies and persons
associated with the issuer or depositors, bondholders or subscribers to the services with the issuer.
(b) Key points to be noted
In line with the definition of ‘employee’ under the ICDR 2018, only the following would qualify as employees for the purpose of reservation in the
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public offer, permanent employee, working in India or outside India, of the issuer or of the promoters or subsidiary company of the issuer, or a
non-independent director of the issuer (who either himself/herself or through their relatives or through any body corporate, directly or indirectly,
does not hold more than 10 % of the outstanding equity shares of the issuer).
Regulation 33 (1) (b), inter-alia, states that reservation can be made for shareholders of a listed promoter companies. Therefore, in case the
promoter is a listed body corporate the interpretation of the present regulation would have to be looked at.
7. Minimum subscription – Timeline for refund and interest
(a) Key changes:
Timeline for refund: Maximum 15 days from issue closure.
Interest rate for delay in refund/ unblocking /allotment: In case of delay in refund, unblocking or allotment, now the interest payable by the issuer
is specified as 15 % per annum.
(b) Key points to be noted:
Timeline of payment of interest is not specified in the aforementioned regulation. Accordingly, the DRHP/ offer document would continue with
similar disclosures to this extent.
The obligation of paying interest on delay in allotment/ unblocking/ refunds continues to be that of the issuer.
8. Subscription period
(a) Key changes
Flexibility for extension of offer period up to 10 working days on account of additional scenarios such as force majeure, banking strike or similar
circumstances.
(b) Implication and analysis:
The additional scenarios under which the offer can be extended shall have to be recorded in writing by the issuer.
9. Oversubscription
(a) Key changes:
Threshold for allotment in case of oversubscription has been reduced to 1 % of the net offer to public from 10 % of the net offer to public.
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The ICDR 2018 now necessitates an additional involvement of the designate stock exchange by providing for a consultation with them for the said
oversubscription.
10. Responsibility of the lead managers – Timeline
(a) Key changes:
Timeline of responsibility: Responsibility of the lead managers has now been restricted until the issue completion.
Scope of responsibility: Responsibility of the lead managers is now clarified to be only to the issue and issue related matters.
(b) Key points to be noted:
Adequate carve outs in the DRHP/ offer document and offer agreement should be included.
11. Pre-IPO/ Restriction on further capital issues
(a) Key changes:
For further capital issuances between the date of filing the draft offer document and the listing of the specified securities offered, it is required to
disclose details of either the number of securities proposed to be issued or amounts proposed to be raised in the DRHP/ offer document and not
both.
(b) Key points to be noted:
The ICDR 2018 as was the case in the ICDR 2009 contemplates only issuance of securities. However, as was done under the ICDR 2009, the
intent of the said regulation would have to be read to cover pre-IPOs through secondary sales as well.
12. Cap on NII
(a) Key changes
New provision included.
Maximum application by a NII shall not exceed the total number of securities offered in the issue less the total number of securities offered to
QIB.
(b) Implication and analysis
Appropriate language should be factored in the DRHP/ offer documents, particularly in the section “The Offer” and other back-sections.
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ANNEX A
A tabular comparison of the provisions of the ICDR 2018 with the provisions of the ICDR 2009
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
Chapter I – Preliminary
1. Definition of
“Advertisement” Regulation 2 (1) (b)
Defines it to include
1. notices,
2. brochures,
3. pamphlets,
4. show cards,
5. catalogues,
6. hoardings,
7. placards,
8. posters,
9. insertions in newspaper,
10. cover pages of offer documents,
11. pictures, and
12. films in any print media or
electronic media, radio,
television programme.
Regulation 2 (1) (b)
Defines it to include:
1. notices,
2. brochures,
3. pamphlets,
4. show cards,
5. catalogues,
6. hoardings,
7. placards,
8. posters,
9. insertions in newspaper,
pictures, and
10. films in any print media or
electronic media, radio,
television programme.
1. Cover pages of offer
documents has been
deleted from the definition.
2. Definition of
“Associate”
Associate was not defined under the
ICDR 2009. Regulation 2 (1) (e)
Defines a person which is an associate
1. New definition has been
included to align with the
Companies Act.1
1 Section 2(6) of the Companies Act defines associate as follows:
““associate company”, in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the
company having such influence and includes a joint venture company.
Explanation.—For the purpose of this clause:
(a) the expression "significant influence" means control of at least twenty per cent. of total voting power, or control of or participation in business decisions under an agreement;
(b) the expression "joint venture" means a joint arrangement whereby the parties that have joint control of the arrangement and have rights to the net assets of the arrangement;”
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
of the issuer and as defined under the
Companies Act, 2013 (“Companies
Act”).
2. The ICDR 2018 provides
the definition of associate
only in the context of an
issuer.
3. Companies Act vis-à-vis
ICDR 2018 - The
Companies Act defines
‘associate companies’, i.e.,
the definition applies to
companies only (including
joint ventures). However,
while the ICDR 2018
refers to the Companies
Act in the context of the
meaning of ‘associate’, the
language of the definition
appears to be agnostic to
the nature in which an
associate is incorporated,
i.e., whether such associate
is a company or body
corporate or firm or
partnership or LLP.
Further, while the ICDR
2018 defines the term
‘associate’ and the
Companies Act defines the
term ‘associate
companies’, in the context
of the disclosures in the
offer document it should be
discussed whether the two
definitions should be read
harmoniously in line with
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
17
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
the practice thus far, i.e., to
include entities irrespective
of the way in which they
are incorporated.
4. Companies Act vis-à-vis
Ind-AS - The term
‘Associate’ is also defined
under the Accounting
Standard (IND AS-28),
which is broader than
definition under the
Companies Act. Further,
under the IND-AS,
‘Significant Influence’ is
the power to participate in
the financial and operating
policy decisions of the
investee, and influence is
presumed to be significant
if the shareholding
threshold reaches 20%,
which is similar to
Companies Act. Further,
on account of the
difference between the
Companies Act and Ind-
AS, there may be a
disconnect in the
‘associates’ disclosed
under the financial
statements vis-à-vis the
general disclosures in the
other sections of the offer
document.
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
18
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
3. Definition of “Book
Building” Regulation 2 (1) (f)
Defines it as a process undertaken to elicit
demand and to assess the price for
determination of the quantum or value of
specified securities or Indian Depository
Receipts, as the case may be, in
accordance with these regulations.
Regulation 2 (1) (g)
Defines it as a process undertaken to
elicit demand and to assess the price for
determination of the quantum or value
or coupon of specified securities or
Indian Depository Receipts, as the case
may be, in accordance with these
regulations.
1. Insertion of the coupon is
relevant with respect to
Indian Depository Receipts
and debt securities.
4. Definition of “Lead
Manager”/ “Book
Runner”
Regulation 2 (1) (g)
Defines it as a merchant banker appointed
by the issuer to undertake the book
building process.
Regulation 2 (1) (cc)
Defines it as a merchant banker
registered with the Board and appointed
by the issuer to manage the issue and in
case of a book built issue, appointed by
the issuer to act as the book running lead
manager(s) for the purposes of book
building.
1. Definition of lead manager
has been inserted in place
of book runner.
5. Definition of “Control” Regulation 2 (1) (i)
It shall have same meaning as assigned to
it under clause (c) of sub-regulation (1) of
regulation 2 of the Securities and
Exchange Board of India (Substantial
Acquisitions of Shares and Takeovers)
Regulations, 1997.
Regulation 2 (1) (i)
It shall have the same meaning as
assigned to it under the Securities and
Exchange Board of India (Substantial
Acquisitions of Shares and Takeovers)
Regulations, 2011
1. Reference to erstwhile
takeover code has been
replaced with extant
takeover code.
6. Definition of
“Designated Stock
Exchanges”
Regulation 2 (1) (l)
Defines it as a recognised stock exchange
in which securities of an issuer are listed
or proposed to be listed and which is
chosen by the issuer as a designated stock
exchange for the purpose of a particular
issue of specified securities under these
Regulation 2 (1) (l)
Defines it as a recognised stock
exchange having nationwide trading
terminals chosen by the issuer on which
securities of an issuer are listed or
proposed to be listed for the purpose of a
particular issue of specified securities
–
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
19
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
regulations:
Provided that where one or more of such
stock exchanges have nationwide trading
terminals, the issuer shall choose one of
them as the designated stock exchange:
Provided further that subject to the
provisions of this clause, the issuer may
choose a different recognised stock
exchange as a designated stock exchange
for any subsequent issue of specified
securities under these regulations.
under these regulations:
Provided that, the issuer may choose a
different recognised stock exchange as a
designated stock exchange for any
subsequent issue of specified securities.
7. Definition of “Draft
Letter of Offer”
Draft Letter of Offer was not defined
under the ICDR 2009. Regulation 2 (1) (m)
“Draft Letter of Offer” means the draft
letter of offer filed with Securities and
Exchange Board of India (“SEBI”) in
relation to a rights issue under these
regulations
New insertion.
8. Definition of “Draft
Offer Document”
Draft Offer Document was not defined
under the ICDR 2009. Regulation 2 (1) (n)
“draft offer document” means the draft
offer document filed with the Board in
relation to a public issue under these
regulations
New insertion.
9. Definition of
“Employee” Regulation 2 (1) (m)
Defines it as:
(a) permanent and full-time
employee,
(b) working in India or abroad, of
Regulation 2 (1) (o)
Defines it as:
(a) permanent employee,
(b) working in India or outside
India, of the issuer or of the
1. This change aligns the
definition under the
Companies (Share Capital
and Debentures) Rules,
2014.
2. A proviso has been
included to distinguish
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November 2018 AZB Capital Markets Update
20
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
the issuer or of the holding
company or subsidiary company
or of that material associate(s) of
the issuer whose financial
statements are consolidated with
the issuer’s financial statements
as per Accounting Standard 21,
(c) or a director of the issuer,
whether whole time or part time,
and
Does not include (i) promoters and (ii) an
immediate relative of the promoter (i.e.,
any spouse of that person, or any parent,
brother, sister or child of that person or of
the spouse).
promoters or subsidiary
company of the issuer, or a
director of the issuer, whether
whole-time or not.
Does not include (i) promoters, (ii) a
person belonging to the promoter group;
or (iii) a director who either
himself/herself or through their relatives
or through any body
corporate, directly or indirectly, holds
more than ten per cent. of the
outstanding equity shares of the issuer.
between the definition
applicable for general
disclosures (ICDR 2018
applies) vis-à-vis the
definition for stock option
scheme (SEBI (Share
Based Employee Benefits)
Regulations, 2014 apply).
In this context, it should be
noted that, the definition of
‘employee’ under the
ICDR 2018 and the SEBI
(Share Based Employee
Benefits) Regulations,
2014has almost been
aligned.
3. Requirement of employees
being ‘full-time’ has been
deleted.
4. Scope of the definition has
been narrowed vis-à-vis the
ICDR 2009 to exclude: (i)
employees of material
associates of the issuer;
and (ii) directors who
either directly or indirectly
hold more than 10% of the
issuer’s share capital.
Further, the amended
definition also includes
certain language changes,
including, replacing the
term ‘immediate relatives
of the promoters’ with
‘promoter group’ and
‘holding company’ with
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November 2018 AZB Capital Markets Update
21
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
‘promoter’.
5. While the definition of
‘employees’ under the
ICDR 2018 as well as the
SEBI (Share Based
Employee Benefits)
Regulations, 2014 refer to
‘permanent employees’, it
should be noted that
Regulations 5(2)
(exemption for outstanding
stock options from
eligibility requirements)
and 17(a) (exemption from
one year lock-up) has been
clarified to include
employees who are not
currently on the pay-roll of
the issuer. While this
clarification does not have
any bearing to the extent of
reservation and pricing,
this is a welcome change
for extending the benefits
of outstanding stock
options/ equity shares from
such options on employees
who are no longer on the
payrolls of the issuer.
6. The excluded categories
will no longer be eligible
for employee reservation
and differential pricing.
7. On account of alignment in
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
22
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
the said definition with the
one under the SEBI (Share
Based Employee Benefits)
Regulations, 2014, i.e.,
exclusion of employees of
associates and directors
holding above 10%, there
should not be a disconnect
between employees
eligible for employee
reservation as well as
employees under the ESOP
disclosure. Further,
outstanding options held by
such a director or
employee of material
associate will not be
exempted under:
a. Regulation 5(2) of the
ICDR 2018 (
exemption to
outstanding stock
options from
conversion ); and
b. Regulation 17(a) of the
ICDR 2018
(exemption from one
year lock-in to shares
resulting from stock
options).
8. Unlike the ICDR 2009,
now definition of employee
refers to employee of
“promoter” and not
“holding company.”
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
23
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
10. Definition of “fugitive
economic offender”
The concept of a fugitive economic
offender was not there in the ICDR 2009. Regulation 2(1) (p)
Defines it as an individual who is
declared a fugitive economic offender
under Section 12 of the Fugitive
Economic Offenders Act, 2018.
1. An issuer is not eligible to
make an initial public
offer, if any of its
promoters or directors is a
fugitive economic
offender. Similar eligibility
requirement has been
included for all other forms
of issuances pursuant to the
ICDR 2018.
2. Please also see ‘Entities
not eligible to make an
Initial Public Offer’ at
serial number 37 below.
11. Definition of “General
Corporate Purposes” Regulation 2 (1) (na)
Defines it as purposes for which no
specific amount is allocated or any
amount so specified towards General
Corporate Purpose or any such purpose
by whatever name called, in the draft
offer document filed with SEBI:
Provided that any issue related expenses
shall not be considered as a part of
General Corporate Purpose merely
because no specific amount has been
allocated for such expenses in the draft
offer document filed with SEBI.
Regulation 2 (1) (r)
Defines it as purposes for which no
specific amount is allocated or any
amount so specified towards general
corporate purpose or any such purpose
by whatever name called, in the draft
offer document, draft letter of offer, or
the offer document:
Provided that any issue related expenses
shall not be considered as a part of
general corporate purpose merely
because no specific amount has been
allocated for such expenses in the draft
offer document, draft letter of offer or
the offer document.
1. The ICDR 2018 now
specifically includes draft
letter of offer and offer
document for the general
corporate purpose.
12. Definition of “Group
Companies” Schedule VIII
Regulation 2 (1) (t)
1. Unlike under the earlier
regime, now the
identification has to be
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November 2018 AZB Capital Markets Update
24
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
It was defined as:
(i) such companies as covered under
the applicable accounting
standards, and
(ii) other such companies as
considered material by the board
of the issuer.
Defines it as:
(i) such companies (other than
promoter(s) and
subsidiary/subsidiaries) with
which there have been related
party transactions, during the
period for which financial
information is disclosed, as
covered under the applicable
accounting standards, and
(ii) other such companies as
considered material by the
board of the issuer.
done on the basis of last
three years’ financials and
stub period.
2. Transactions between the
dates as on which related
party schedule is included
in the DRHP and till the
date of filing of DRHP,
shall also be procured from
issuer.
3. Earlier, there were
conflicting views on
whether promoter(s) and
subsidiaries should be
included within the
definition of Group
Companies and if the
corresponding disclosure is
to be made for these
entities. However, the
ICDR 2018, specifically
excludes promoter(s) and
subsidiaries.
4. Earlier, there were
conflicting views on
whether group companies
should be determined only
on the basis of related party
transactions or to be
considered from the entire
list of group companies.
However, the ICDR 2018
specifies clearly that the
identification has to be
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November 2018 AZB Capital Markets Update
25
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
done only on the basis of
related party transactions.
5. All the entities covered in
the related party schedule
of the restated financial
statements and/or in the
audit reports and with
which there have been/ are
transactions, shall be
covered under the ambit of
group companies. This
could end up being a very
extensive list and all
entities may not be
relevant. For example, if a
company with which the
issuer had related party
transaction in the second
last year and not in the last
year, disclosure and
certificates for that entity
may become tricky.
6. Further, if any entity with
which issuer had
transactions in disclosed
related party schedule, but
now has been wound-up or
is pending strike-off or its
relationship with issuer has
been extinguished then the
lead manager on the deal
may file an exemption
application before SEBI for
excluding such company
from being disclosed in the
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
26
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
document.
7. One item that still needs to
be analyzed is the
inclusion/ exclusion of
selling shareholder from
this definition too and the
approach that needs to be
followed.
13. Definition of “Housing
Finance Company”
Housing Finance Company was not
defined under the ICDR 2009
Regulation 2 (1) (u)
“Housing Finance Company” means a
deposit taking housing finance company
registered with the National Housing
Bank for carrying on the business of
housing finance.
1. Definition of housing
finance company (“HFC”)
has been included in line
with changes in regulation
governing pledge of
locked-in specified
securities by promoters.
Please see “Pledge of
locked-in specified
securities” at serial number
46.
14. Definition of
“Infrastructure Sector” Regulations 26, 31 and 33 read with
Schedule X
Regulation 2 (1) (v) 1. No change in inclusion of
facilities/services.
15. Definition of “Issue
Size” Regulation 2 (1) (q)
Defines it as offer through offer document
and promoters’ contribution
Regulation 2 (1) (z)
Defines it as offer through offer
document and promoters’ contribution
brought in as part of the issue.
–
16. Definition of “Issuer” Regulation 2 (1) (r)
Defines it as any person making an offer
of specified securities.
Regulation 2 (1) (aa)
Defines it as a company or a body
corporate authorized to issue specified
securities under the relevant laws and
1. The new definition clarifies
that a selling shareholder is
not to be considered as an
‘issuer’ and that only the
entity whose shares are
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November 2018 AZB Capital Markets Update
27
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
whose specified securities are being
issued and/or offered for sale in
accordance with the ICDR 2018 and
does not include LLPs or funds or firms
whether incorporated in or outside India.
being listed is to be
considered as an ‘issuer’.
This definition has been
amended to bring it in line
with market practice.
17. Definition of “Key
managerial personnel” Regulation 2 (1) (s)
It contained similar definition except it
included “officer with vested executive
power.”
Regulation 2 (1) (bb)
Defines it as:
(i) officer or personnel of the
issuer who are members of the
issuer’s core management team
(excluding board of directors)
which includes members of
management;
(ii) one level below the executive
directors of the issuer;
(iii) functional heads and ‘key
managerial personnel’ as
defined under the Companies
Act; or
(iv) any other person whom the
issuer may declare as a key
managerial personnel;
1. The definition has been
broadened to include:
(i) functional heads of the
issuer; and
(ii) KMP as per Section 2(51)
of the Companies Act.2
2. Further, the persons vested
with executive powers was
also a parameter for KMP
identification under ICDR
2009, whereas the ICDR
2018, inter-alia, states that
persons of the core
management team shall be
identified as KMPs.
3. One of the major changes
vis-à-vis KMP under the
ICDR 2018 is that
agreements entered into by
2 Section 2(51) of the Companies Act defines key managerial personnel as follows:
““key managerial personnel”, in relation to a company, means—
(i) the Chief Executive Officer or the managing director or the manager;
(ii) the company secretary;
(iii) the whole-time director;
(iv) the Chief Financial Officer;
(v) such other officer, not more than one level below the directors who is in whole-time employment, designated as key managerial personnel by the Board; and
(vi) such other officer as may be prescribed;”
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
28
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
KMP with any shareholder
or any other third party
with regard to
compensation or profit
sharing in connection with
dealings in the securities of
the issuer is categorized as
a material agreement
which would now have to
be made available for
inspection. Thus, the list of
material contracts would
be fairly lengthy now.
18. Definition of “Listed
Issuer” Regulation 2 (1) (t)
Defines it as an issuer whose equity
shares are listed on a recognised stock
exchange.
Regulation 2 (1) (dd)
Defines it as an issuer whose equity
shares are listed on a recognised stock
exchange having nationwide trading
terminals.
–
19. Definition of “Net Offer” Regulation 2 (1) (u)
Defines it as an offer of specified
securities to the public but does not
include reservations
Regulation 2 (1) (ff)
Defines it as an offer of specified
securities to the public but does not
include reservations and promoters’
contribution brought in as part of the
issue.
1. Under the ICDR 2009, net
offer excluded only the
reservations. Under the
ICDR 2018, promoters’
contribution brought in as
part of the issue is also
excluded in addition to the
reservations. By
implication, such
promoters’ contribution is
also excluded from the
ambit of offer through
offer document.
20. Definition of “Net Regulation 26 Explanation Regulation 2 (1) (gg) –
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November 2018 AZB Capital Markets Update
29
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
Tangible Assets”
Defines it as the sum of all net assets of
the issuer, excluding intangible assets as
defined in Accounting Standard 26 (AS
26) issued by the Institute of Chartered
Accountants of India
Defines it as the sum of all net assets of
the issuer, excluding intangible assets as
defined in Accounting Standard 26 (AS
26) or Indian Accounting Standard (Ind
AS) 38, as applicable, issued by the
Institute of Chartered Accountants of
India.
21. Definition of “Net
Worth” Regulation 2 (1) (v)
It was defined as:
(i) aggregate of the paid up share capital,
share premium account;
(ii) reserves and surplus (excluding
revaluation reserve) as reduced by the
aggregate of miscellaneous
expenditure (to the extent not
adjusted or written off); and
(iii) the debit balance of the profit and
loss account.
Regulation 2 (1) (hh)
Defines it as:
(i) aggregate value of the paid-up
share capital and all reserves
created out of the profits and
securities premium account;
(ii) debit or credit balance of profit
and loss account, after
deducting the aggregate value
of the accumulated losses,
deferred expenditure; and
(iii) miscellaneous expenditure not
written off, as per the audited
balance sheet;
But does not include reserves created
out of revaluation of assets, write-back
of depreciation and amalgamation.
1. The definition is aligned
with Section 2(57) of the
Companies Act.
22. Definition of “Offer
Document” Regulation 2 (1) (x)
Defines it as red herring prospectus,
prospectus or shelf prospectus and
information memorandum in terms of
Regulation 2 (1) (kk)
Defines it as red herring prospectus,
prospectus or shelf prospectus, as
applicable, referred to under the
1. Information memorandum
has been deleted from the
definition, since the
disclosure requirement has
now been deleted under the
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
30
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
section 60A of the Companies Act, 1956
in case of a public issue and letter of offer
in case of a rights issue.
Companies Act, in case of a public
issue, and a letter of offer in case of a
rights issue.
Companies Act too.
23. Definition of “Offer
through Offer
Document”
Regulation 2 (1) (y)
It contained similar definition except that
the definition of net offer did not exclude
promoter contribution.
Regulation 2 (1) (ll)
Defines it as net offer and reservations.
1. Offer through offer
document excludes
promoters’ contribution
brought in as part of the
issue, consequent to
exclusion of such
promoters’ contribution in
the definition of net offer.
24. Definition of “Promoter” Regulation 2 (1) (za)
It was defined to include:
(i) the person or persons who are in
control of the issuer;
(ii) the person or persons who are
instrumental in the formulation
of a plan or programme pursuant
to which specified securities are
offered to public; and
(iii) the person or persons named in
the offer document as promoters.
Regulation 2 (1) (oo)
Defines to include a person:
(i) who has been named as such in
a draft offer document or offer
document or is identified by the
issuer in the annual return
referred to in Section 92 of the
Companies Act; or
(ii) who has control over the affairs
of the issuer, directly or
indirectly whether as a
shareholder, director or
otherwise; or
(iii) in accordance with whose
advice, directions or
instructions the board of
directors of the issuer is
accustomed to act: except
person acting in professional
1. The definition has been
aligned with Section 2(69)
of the Companies Act.
2. Now the identification of a
promoter also has to be
based on the person
identified in the annual
return filed by the
company.
3. On the deals where annual
return includes persons in
addition to the promoters,
MGT-7 should either be
refiled, if possible, and the
issuer should clarify the
same in the resolution
passed for identification of
promoters.
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
31
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
capacity.
Promoter contribution does not include:
(i) Person mentioned in Regulation
(iii) acting in professional
capacity, and
(ii) financial institution, scheduled
commercial bank, foreign
portfolio investor other than
Category III foreign portfolio
investor, mutual fund, venture
capital fund, alternative
investment fund, foreign venture
capital investor, insurance
company registered with the
Insurance Regulatory and
Development Authority of India or
any other category as specified by
the SEBI from time to time,
wherein twenty per cent. or more
of the equity share capital of the
issuer is held by such person
unless such it satisfies other
requirements prescribed under
ICDR 2018.
4. The requirement of
identifying persons
instrumental in formulation
of a plan or programme as
Promoter has now been
removed. This is a
welcoming change since
the identification was a
very subjective exercise
and in case the person was
not part of the issuer
anymore, it would render
this requirement aimless.
5. Threshold for shareholding
under second proviso has
been increased from 10%
to 20%. Further, exemption
is extended additionally to
VCFs, FVCIs and
insurance companies.
However, this exemption
does not cover the
investors who have
invested under FDI route
or domestic private equity
investors.
6. The following entities,
although can now
contribute for promoters’
contribution, they are
exempted from being
identified as promoters:
i. Alternative investment
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November 2018 AZB Capital Markets Update
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No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
funds,
ii. Foreign venture capital
investors,
iii. Scheduled commercial
banks,
iv. Public financial
institutions, and
v. Insurance companies
registered with the
Insurance Regulatory and
Development Authority of
India.
25. Definition of “Promoter
Group” Regulation 2 (1) (zb)
It contained similar definition except that
the shareholding threshold which was
earlier 10% under the ICDR 2009 has
now been increased to 20%..
Regulation 2 (1) (pp)
It is defined as:
(i) the promoter;
(ii) an immediate relative of the
promoter (i.e. any spouse of that
person, or any parent, brother, sister
or child of the person or of the
spouse); and
(iii) wherein promoter is a body
corporate, it will include:
(a) a subsidiary or holding
company of such body
corporate;
(b) any body corporate in wherein
the promoter holds 20%. or
more of the equity share
capital;
(c) and/or any body corporate
1. The threshold has been
increased from 10% to
20% shareholding.
2. “Relative” means a relative
as defined under the
Companies Act, 2013
which is broader than
‘immediate relative’. For
the purpose of Promoter
Group identification, the
term relatives should be
read as ‘immediate
relatives’.
3. Insurance companies or
entities belonging to any
other category as specified
by SEBI from time to time
are exempt from being
identified as a Promoter
Group merely by virtue of
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November 2018 AZB Capital Markets Update
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
which holds twenty per cent. or
more of the equity share capital
of the promoter;
(d) any body corporate wherein a
group of individuals or
companies or combinations
thereof acting in concert, which
hold 20%. or more of the equity
share capital in that body
corporate and such group of
individuals or companies or
combinations thereof also holds
twenty percent. or more of the
equity share capital of the
issuer and are also acting in
concert; and
(iv) in case the promoter is an
individual:
(a) any body corporate in which
20%. or more of the equity
share capital is held by the
promoter or an immediate
relative of the promoter or a
firm or Hindu Undivided
Family in which the promoter
or any one or more of their
relative is a member;
(b) any body corporate in which a
body corporate as provided in
(a) above holds twenty per
cent. or more, of the equity
share capital; and
(c) any Hindu Undivided Family
or firm in which the aggregate
the fact that 20% or more
of the equity share capital
is held by them (except
with respect to such
entities’ subsidiaries or
companies promoted by
them or for the mutual
funds sponsored by them).
They will need to satisfy
the other conditions
prescribed in order to meet
the test of a promoter
group entity.
4. The definition has been
amended to increase the
shareholding requirement
for the purposes of being
classified as a promoter
group entity.
5. However, insurance
companies or entities
belonging to any other
category as specified by
SEBI from time to time are
exempted from being
identified as a Promoter
Group merely by virtue of
the fact that 20% or more
of the equity share capital
is held by them (except
with respect to such
entities’ subsidiaries or
companies promoted by
them or for the mutual
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November 2018 AZB Capital Markets Update
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
share of the promoter and their
relatives is equal to or more
than twenty per cent. of the
total capital.
(v) all persons whose shareholding is
aggregated under the heading
"shareholding of the promoter
group" wherein financial institution,
scheduled bank, foreign portfolio
investor other than Category III
foreign portfolio investor, mutual
fund, venture capital fund,
alternative investment fund, foreign
venture capital investor, insurance
company registered with the
Insurance Regulatory and
Development Authority of India or
any other category as specified by
SEBI from time to time, shall not be
deemed to be promoter group
merely by virtue of the fact that
twenty per cent. or more of the
equity share capital of the promoter
is held by such person or entity:
Further financial institution, scheduled
bank, foreign portfolio investor other
than Category III foreign portfolio
investor, mutual fund, venture capital
fund, alternative investment fund and
foreign venture capital investor
insurance company registered with the
Insurance Regulatory and Development
Authority of India or any other category
as specified by SEBI from time to time
funds sponsored by them).
They will need to satisfy
the other conditions
prescribed in order to meet
the test of a promoter
group entity.
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November 2018 AZB Capital Markets Update
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No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
shall be treated as promoter group for
the subsidiaries or companies promoted
by them or for the mutual fund
sponsored by them.
26. Definition of “Qualified
Institutions Placement” Regulation 81 (b)
Defines it as an allotment of eligible
securities by a listed issuer to qualified
institutional buyers on private placement
basis in terms of these regulations.
Regulation 2 (1) (tt)
Defines it as an issue of eligible
securities by a listed issuer to qualified
institutional buyers on a private
placement basis and includes an offer
for sale of specified securities by the
promoters and/or promoter group on a
private placement basis, in terms of
these regulations.
ICDR 2018 allows QIP to be
done through OFS.
27. Definition of “Scheduled
commercial bank”
Scheduled commercial bank was not
defined under the ICDR 2009.
Regulation 2 (1) (zz)
“scheduled commercial bank” means
scheduled commercial banks as included
in the second schedule to the Reserve
Bank of India Act, 1934.
–
28. Definition of “Selling
Shareholder(s)”
Selling shareholder(s) was not defined
under the ICDR 2009. Regulation 2 (1) (bbb)
Defines it as any shareholder of the
issuer who is offering for sale the
specified securities in a public issue in
accordance with ICDR 2018.
1. Following are the
confirmations which are to
be obtained from Selling
Shareholders:
(i) Whether they are debarred
from buying, selling or
dealing in securities under
any order or direction
passed by SEBI or any
securities market regulator
in any jurisdiction,
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
(ii) Whether they are declared
as a wilful defaulter.
(iii) Whether they are fugitive
economic offender, only in
respect to individuals.
(iv) Whether they have
committed any securities
law violation in any
jurisdiction.
(v) Whether they have
complied with the
Companies (Significant
Beneficial Ownership)
Rules, 2018
2. Earlier, under the ICDR
2009, one of the views
taken in the market was to
extend the eligibility
conditions that were
applicable to the issuer to
the selling shareholder(s).
However, pursuant to the
definition of the selling
shareholder, there are now
corresponding
confirmations, disclosures
and eligibility that are
specifically applicable to
the selling shareholder(s).
29. Definition of “securities
law”
Securities law was not defined under the
ICDR 2009. Regulation 2(1)(ccc)
1. The scope and
interpretation of the term
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
37
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
Defines it as:
the Securities Contracts (Regulation)
Act, 1956, the Depositories Act, 1996,
and the rules and regulations made
thereunder and the general or special
orders, guidelines or circulars made or
issued by SEBI thereunder and the
provisions of the Companies Act or any
previous company law and any
subordinate legislation framed
thereunder, which are administered by
SEBI.
“securities law” varied for
various confirmations that
were required from various
parties. Pursuant to the
insertion of the definition
under the ICDR 2018 the
compliance with securities
law would mean to read
strict compliance with the
laws that are included
therein.
2. The term “securities law”
has been referred to in the
following disclosures:
(i) Pursuant to Regulation
23(8), an issuer is now
required to appoint a
compliance officer, among
others, for monitoring the
compliance of securities
law in case of, among
others, rights issue, further
public offer;
(ii) Pursuant to Regulation
99(i) (Fast Track Issue), the
issuer, promoter, promoter
group or director of the
issuer should not have
settled any alleged
violation of securities laws
through the consent or
settlement mechanism with
SEBI during three years
immediately preceding the
reference date.
3. Further, under ICDR 2009,
AZB & Partners Privileged and confidential
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
a disclosure with respect to
the violation of the
securities laws was
required to be included
under the section “Risk
Factors”. However, the
same has been deleted
under the ICDR 2018.
30. Definition of “Stock
Exchange”
Stock Exchange was not defined under
the ICDR 2009. Regulation 2 (1) (ggg)
“stock exchange” means any recognised
stock exchange having nationwide
trading terminals chosen by the issuer on
which securities of an issuer are listed or
proposed to be listed for the purpose of a
particular issue of specified securities
under these regulations, other than an
SME
Exchange.
–
31. Definition of “Syndicate
Member” Regulation 2 (1) (zl)
Defines it as an intermediary registered
with SEBI and who is permitted to carry
on the activity as an underwriter.
Regulation 2 (1) (hhh)
Defines it as an intermediary registered
with SEBI and who is permitted to
accept bids, applications and place
orders with respect to the issue and carry
on the activity as an underwriter.
–
32. Definition of
“Systemically important
non-banking financial
companies”
Regulation 2 (1) (zla)
Defines it as a non-banking financial
company registered with the Reserve
Bank of India and having a net-worth of
more than five hundred crore rupees as
per the last audited financial statements.
Regulation 2 (1) (iii)
Defines it as a non-banking financial
company registered with the Reserve
Bank of India and recognised as
systemically important non-banking
financial company by the Reserve Bank
of India.
–
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
39
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
33. Definition of “Valuer” Regulation 70
Defines it as a person who is registered
under section 247 of the Companies Act
and the relevant Rules framed thereunder:
Provided that till such date on which
section 247 of the Companies Act and the
relevant rules come into force, valuer
shall mean an independent merchant
banker registered with SEBI or an
independent chartered accountant in
practice having a minimum experience of
ten years
Regulation 2 (1) (kkk)
Defines it as a person who is registered
under section 247 of the Companies Act
and the relevant rules framed thereunder
or as specified by SEBI.
1. Section 247 of the
Companies Act came into
force on October 18, 2017.
34. Definition of “Wilful
Defaulter” Regulation 2 (1) (zn)
Defines it as an issuer who is categorized
as a wilful defaulter by any bank or
financial institution or consortium thereof,
in accordance with the guidelines on
wilful defaulters issued by the Reserve
Bank of India and includes an issuer
whose director or promoter is categorized
as such.
Regulation 2 (1) (lll)
Defines it as a person or an issuer who
or which is categorized as a wilful
defaulter by any bank or financial
institution (as defined under the
Companies Act) or consortium thereof,
in accordance with the guidelines on
wilful defaulters issued by the Reserve
Bank of India.
–
35. Definition of “Working
Day”
“working day” was not defined under the
ICDR 2009.
Regulation 2 (1) (mmm)
Defines “working day” as all days on
which the commercial banks in the city
(as specified in the offer document) are
open for business.
Also, for the purpose of announcement
1. A distinction has been
made for the days that
constitute working days
with respect to (i) the
announcement of the price
band and the issue period,
and (ii) for the period
between issue closing and
listing.
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
40
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
of price band and bid/ issue period,
working day shall exclude Saturdays,
Sundays and public holidays.
For the purpose of calculating the time
period between the bid/ issue closing
date and the listing on the stock
exchanges, working day shall include all
trading days of the stock exchanges,
excluding Sundays and bank holidays,
as per circulars issued by the SEBI.
2. For (i) above, Saturdays,
Sundays and public
holidays are not working
days, and for (ii) above, all
trading days excluding
Sundays and bank holidays
are working days.
36. Applicability of the
regulations Regulation 3
Contained similar provisions. However,
the ICDR 2009 was applicable to a rights
issue where the aggregate value of the
issue is fifty lakh rupees or more.
Further, the ICDR 2009 did not have any
provisions for (a) an initial public offer by
a small and medium enterprise, or (b) a
listing on the institutional trading
platform through an issue or without an
issue.
Regulation 3
The ICDR 2018 is applicable to (a) an
initial public offer; (b) a rights issue
(where the aggregate value of the issue
is ten crore rupees or more, from the
previous threshold of fifty lakhs); (c) a
further public offer; (d) a preferential
issue; (e) a qualified institutions
placement; (f) an initial public offer of
Indian depository receipts; (g) a rights
issue of Indian depository receipts; (h)
an initial public offer by small and
medium enterprise; (i) a listing on the
institutional trading platform through an
issue or without an issue; and (j) a bonus
issue.
For rights issues of less than ten crore
rupees, the issuer is required to prepare
the letter of offer in accordance with the
ICDR 2018 and file it with SEBI for
information and dissemination on
While the ICDR 2018 specifies
the date on which the said
regulations would be effective,
it does not clarify the
applicability on offer
documents to be filed in
relation to deals for which
DRHPs have already been
cleared by SEBI.
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
41
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
SEBI’s website.
Chapter II - INITIAL PUBLIC OFFER ON MAIN BOARD
37. Entities not eligible to
make an initial public
offer
Regulation 4 (2) (a)
Contained similar provision, however,
debarment of selling shareholders has
now been included and debarment of
‘persons in control’ has now been
removed.
Regulation 5 (1) (a)
The ICDR 2018 provides that an issuer
will not be eligible to make an initial
public offer if the issuer, any of its
promoters, promoter group or directors
or selling shareholders are debarred
from accessing the capital markets by
SEBI. Further, the restriction does not
apply to persons or entities, which were
debarred in the past and the period of
debarment is already over as on the date
of filing of the draft offer document.
1. Debarment of selling
shareholders from
accessing the capital
markets has now been
made an eligibility
condition. This change,
however, is consistent with
the market practice.
2. Instances of debarment
from accessing capital
market, before the date of
the draft red herring
prospectus, will no longer
impact eligibility of an
issuer, provided that period
of debarment is over.
Regulation 4 (2) (b)
The ICDR 2009 provided that an issuer
will not be eligible to make an issue of
specified securities 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.
Regulation 5 (1) (b)
The ICDR 2018 provides that an issuer
will not be eligible to make an initial
public offer if any of the promoters or
directors of the issuer is a promoter or
director of any other company which is
debarred from accessing the capital
market by SEBI. Further, the restriction
does not apply to persons or entities,
which were debarred in the past and the
period of debarment is already over as
on the date of filing of the draft offer
1. It has been clarified that
instances of debarment
from accessing capital
market, which expired
before the date of the draft
red herring prospectus, will
no longer impact eligibility
of an issuer.
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
42
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
document.
There was no provision under the ICDR
2009. Regulation 5 (1) (d)
An issuer will not be eligible to make an
initial public offer if any promoter or
director is a fugitive economic offender.
1. If any promoter or director
is a fugitive economic
offender, the issuer will not
be eligible to make an
initial public offer.
2. Please see “Definition of
“Fugitive Economic
Offender”” at serial
number 10.
Regulation 26 (5)
Contained similar provisions.
The ICDR 2009 provided that the
provision are not applicable to
outstanding options granted to employees
pursuant to an employee stock option
scheme framed in accordance with the
relevant Guidance Note or Accounting
Standards, issued by the Institute of
Chartered Accountants of India.
Regulation 5 (2)
Provides that an issuer is not eligible to
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
shares of the issuer.
The provision is not applicable to
outstanding options granted to
employees, whether currently an
employee or not, pursuant to an
employee stock option scheme in
compliance with the Companies Act, the
relevant Guidance Note or accounting
standards, if any, issued by the Institute
of Chartered Accountants of India or
pursuant to the Companies Act, in this
regard.
1. An issuer is eligible to
undertake an initial public
offer if the existing
outstanding convertible
securities or option to
receive equity shares are
options granted to an
employee, irrespective of
whether such person is
currently an employee or
not, pursuant to an
employee stock option
scheme in compliance with
the Companies Act, the
relevant Guidance Note or
accounting standards, if
any, issued by the Institute
of Chartered Accountants
of India or pursuant to the
Companies Act.
Accordingly, the previous
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
43
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
practice of ensuring that
options held by past
employees lapse or are
exercised before the filing
of the Draft Red Herring
Prospectus, is no longer
relevant.
2. Further, pursuant to the
new definition of
employee, this exemption
will not apply to following
persons since they are not
considered as employees:
(a) an employee who is a
promoter or a person
belonging to the
promoter group, or
(b) a director who either
himself or through his
relative or through any
body corporate,
directly or indirectly,
holds more than 10%
of the outstanding
equity shares of the
issuer.
38. Lock-in of specified
securities held by
persons other than the
promoters
Regulation 37
Contained a similar provision. However,
the provision was not applicable to equity
shares allotted to employees under an
employee stock option or employee stock
purchase scheme of the issuer prior to the
initial public offer, if the issuer has made
Regulation 17
The ICDR 2018 provides that the entire
pre-issue capital held by persons other
than the promoters is required to be
locked-in for a period of one year from
the date of allotment in the initial public
offer.
1. Clarification has been
given that existing as well
as past employees are
exempted from this
provision.
This is significantly
different from the ICDR
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
44
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
full disclosures with respect to such
options or scheme in accordance with Part
A of Schedule VIII.
However, the provision is not applicable
to equity shares allotted to employees or
an employee stock option trust or
transferred to the employees by an
employee stock option trust pursuant to
exercise of options by the employees,
whether currently an employee or not,
under an employee stock option or
employee stock purchase scheme of the
issuer prior to the initial public offer, if
the issuer has made full disclosures with
respect to such options or scheme in
accordance with Part A of Schedule VI.
2009. Irrespective of
whether a person is an
employee of an issuer
during the period of the
lock-in, the exemption
from the lock-in will apply
as long as such a person
was issued equity shares
under an employee stock
option or purchase scheme
prior to the initial public
offer.
2. Previously, while there was
no requirement under the
ICDR 2009, it was a
practice to include a
provision under the
employee stock option
scheme that upon
termination of
employment, options
granted to an employee
would either be vested or
cancelled. Therefore, under
the ICDR 2009, any person
who ceased to be an
employee was not exempt
from lock-in.
39. Eligibility requirements
for an initial public offer
Regulation 26 (1) (a)
The ICDR 2009 was silent on the manner
of calculation of net tangible assets and
did not state that it needed to be
Regulation 6 (1) (a)
The ICDR 2018 provides that an issuer
shall be eligible to make an initial public
offer only if it has net tangible assets of
1. The ICDR 2018 clarifies
that the net tangible assets,
average operating profits,
net worth and revenue has
to be calculated on a
restated and consolidated
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
calculated on a restated and consolidated
basis.
at least three crore rupees, calculated on
a restated and consolidated basis, in
each of the preceding three full years, of
which not more than fifty percent are
held in monetary assets.
basis.
Regulation 26 (1) (b)
The ICDR 2009 contained similar
provisions, however the issuer was
eligible basis the three most profitable
years out of the immediately preceding
five years. This has now been changed to
preceding three years (of twelve months
each), with operating profit in each of
these preceding three years.
Regulation 6 (1) (b)
The ICDR 2018 provides that an issuer
shall be eligible to make an initial public
offer only if it has an average operating
profit of at least fifteen crore rupees,
calculated on a restated and consolidated
basis, during the preceding three years
(of twelve months each), with operating
profit in each of these preceding three
years.
1. Average operating profits
to be calculated on
immediately preceding
three years and each
preceding year.
2. The ICDR 2009 provided
an issuer the liberty to
select the three most
profitable years out of the
immediately preceding five
years. This has now been
changed to include only
three years and such three
years should have the
required operating profit
for the issuer.
Regulation 26 (1) (d)
The ICDR 2009 provided that an initial
public offer can be made if 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.
No specific provision.
1. Condition of issue size
including the previous
issues in same fiscal year
not exceeding five times
the net worth has been
deleted.
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
46
Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
Regulation 27
The ICDR 2009 provided that an issuer
may make a further public offer if (a) 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; and (b) 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.
Further, if the above two conditions are
not satisfied, a further public offer can be
made if the issue is made through the
book building process and the issuer
undertakes to allot, at least seventy five
per cent. of the net offer to public, to
QIBs, and to refund full subscription
money if it fails to make the said
minimum allotment to QIBs.
Regulation 103 (1)
Under the ICDR 2018, an issuer may
make a further public offer, 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 its new name.
-
40. General conditions Regulation 4
The ICDR 2009 was silent on the
condition with respect to securities held
by the promoters in dematerialized form.
Regulation 7 (c)
In addition to the existing general
conditions, the ICDR 2018 provides an
additional condition with respect to the
securities held by the promoters, which
shall be in dematerialized form prior to
the filing of the offer document.
1. This is in line with the
Companies (Prospectus
and Allotment of
Securities) Third
Amendment Rules, 2018
(notified on September 10,
2018), which provide that
entire holding of securities
of, inter alia, the promoters
has to be in dematerialized
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Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
form.
41. Additional conditions for
an offer for sale Regulation 26 (6)
Contained similar provisions, however,
under the ICDR 2018, it has been
clarified that full disclosures are required
to be made regarding conversion or
exchange of fully paid-up compulsorily
convertible securities.
Regulation 8
Provides that only such fully paid-up
equity shares may be offered for sale to
the public, which have been held by the
sellers for a period of at least one year
prior to the filing of the draft offer
document. However, in case the equity
shares received on conversion or
exchange of fully paid-up compulsorily
convertible securities including
depository receipts are being offered for
sale, the holding period of such
convertible securities, including
depository receipts, as well as that of
resultant equity shares together is
required to be considered for the
purpose of calculation of one year
period.
It also provides that such holding period
of one year is required to be complied
with at the time of filing of the draft
offer document.
Further, the ICDR 2018 provides an
explanation that the conversion or
exchange should be completed prior to
filing of the offer document (i.e. red
herring prospectus in the case of a book
built issue and prospectus in the case of
a fixed price issue), provided full
disclosures of the terms of conversion or
exchange are made in the draft offer
1. This is a significant change
as previously, under the
ICDR 2009, while
conversion of convertible
instruments was allowed
till the filing of the RHP,
conversions of convertible
instruments at DRHP stage
were required to the extent
of any resultant equity
shares which were intended
to be a part of the offer for
sale in an IPO.
2. The ICDR 2018 now allow
even such conversion or
exchange (resulting in
equity shares to be offered
in the offer for sale) to be
done by the time of filing
of the Red Herring
Prospectus, subject to full
disclosures of the terms of
conversion or exchange
being made in the DRHP.
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No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
document.
42. Minimum promoters’
contribution Regulation 32 (1)
The ICDR 2009 provided that only
alternative investment funds could
contribute towards meeting the shortfall
in minimum contribution as specified for
the promoters, subject to a maximum of
10% of the post issue capital.
Regulation 14 (1)
In case the post issue shareholding of
the promoters is less than 20%,
alternative investment funds, foreign
venture capital investors, scheduled
commercial banks, public financial
institutions or insurance companies
registered with Insurance Regulatory
and Development Authority of India
may contribute to meet the shortfall in
minimum contribution as specified for
the promoters, subject to a maximum of
10% of the post issue capital, without
being identified as promoter(s).
1. In addition to alternative
investment funds which
was included in the ICDR
2009, certain regulated
entities such as FVCIs,
scheduled commercial
banks, or public financial
institutions or insurance
companies registered with
IRDA are permitted to
contribute in order to meet
the shortfall in minimum
contribution, subject to a
limit of 10% of the post
issue-capital, without being
classified as a promoter.
43. Securities ineligible for
minimum promoters’
contribution
Regulation 33 (1)
Contained a similar provision, however, it
did not include specific provisions for
ineligibility of securities acquired by
foreign venture capital investors or
scheduled commercial banks or public
financial institutions or insurance
companies registered with Insurance
Regulatory and Development Authority
of India, for the computation of minimum
promoters’ contribution.
Regulation 15 (1)
The ICDR 2018 provides that, for the
computation of minimum promoters’
contribution, the following specified
securities shall not be eligible:
(a) specified securities acquired during
the preceding three years, if these 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
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No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
or from bonus issue against
equity shares which are ineligible
for minimum promoters’
contribution;
(b) specified securities acquired by the
promoters and alternative investment
funds or foreign venture capital
investors or scheduled commercial
banks or public financial institutions or
insurance companies registered with
Insurance Regulatory and Development
Authority of India, during the preceding
one year at a price lower than the price
at which specified securities are being
offered to the public in the initial public
offer.
Regulation 33 (2)
Included similar provision, however, the
ICDR 2009 only included such securities
which are acquired pursuant to a scheme
which has been approved under sections
391 to 394 of the Companies Act, 1956,
to be eligible for computation of
promoters’ contribution.
Regulation 15 (2)
The specified securities referred to in
Regulation 15(1)(a) above will be
eligible for computation of promoters’
contribution if such securities are
acquired pursuant to a scheme approved
by:
(a) a High Court (under sections 391 to
394 of the Companies Act, 1956);
or
(b) a tribunal; or
(c) the Central Government (under
sections 230 to 234 of the Act).
1. To align with the
Companies Act.
44. Face value of equity
shares Regulation 31 (1)
Deleted from ICDR 2018. 1. The face value of the
securities has no bearing
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Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
Under the ICDR 2009, an issuer making
an initial public offer could determine the
face value of the equity shares in the
following manner, subject to the
provisions of the Companies Act, 1956,
the SEBI Act, and the ICDR 2009:
(a) if the issue price per equity share was
five hundred rupees or more, the
issuer had the option to determine the
face value at less than ten rupees per
equity share: Provided that the face
value could not be less than one
rupee per equity share; or
(b) if the issue price per equity share was
less than five hundred rupees, the
face value of the equity shares was
required to be ten rupees per equity
share.
on the valuation or
investment decision of the
securities or its price per
share. After listing, there is
no such requirement
applicable. Hence, the
requirement has been
deleted.
45. Lock-in of specified
securities held by the
promoters
Regulation 36
The ICDR 2009 provided for the time
period for which promoters contribution
shares made by Promoters and AIFs are
locked-in.
Further, it defined ‘date of
commencement of commercial
production’ as the last date of the month
in which commercial production in a
manufacturing company is expected to
commence as stated in the offer
document.
Regulation 16
The ICDR 2018 additionally provides
for the lock-in requirements for the
promoters contribution made by foreign
venture capital investors or scheduled
commercial banks or public financial
institutions or insurance companies
registered with Insurance Regulatory
and Development Authority of India.
Further, the term ‘date of
commencement of commercial
production’ has been amended to have
its meaning specifically to a ‘project’ (as
per the definition of the ICDR 2018) in
respect of which the IPO proceeds are
proposed to be utilized as per the
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No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
DRHP/ offer documents
46. Pledge of locked-in
specified securities. Regulation 39
Contained similar provision, however, the
ICDR 2009 did not include that securities
can be pledged with a systemically
important non-banking finance company
or a housing finance company.
Additionally, the ICDR 2009 did not
provide for continuation of the lock-in
with respect to the transferee where the
promoters had pledged their shares which
were locked-in and such pledge was
invoked.
Regulation 21
The ICDR 2018 provides that the
specified securities held by the
promoters and locked-in can be pledged
as a collateral security for a loan granted
by a scheduled commercial bank or a
public financial institution or a
systemically important non-banking
finance company or a housing finance
company, subject to the following:
(a) if the specified securities are
locked-in pursuant to the
requirement of the minimum
promoters’ contribution, the loan
has been granted to the issuer
company or its subsidiaries for the
purpose of financing one or more of
the objects of the issue and the
pledge of specified securities is one
of the terms of sanction of the loan;
or
(b) if the specified securities are
locked-in for a period of one year in
terms of clause (b) of regulation 16
and the pledge of specified
securities is one of the terms of
sanction of the loan.
The ICDR 2018 also provides that such
lock-in shall continue pursuant to the
invocation of the pledge and such
transferee shall not be eligible to transfer
the specified securities till the lock-in
1. Promoters’ locked-in
shares may additionally be
pledged to SI-NBFC and
HFC. Such lenders/pledgee
can now further invoke the
pledge, however the shares
will continue to locked-in
the hands of transferee to
whom shares are
transferred by
lender/pledgee on aforesaid
invocation.
2. Currently, there is an
ambiguity as to whether,
upon invocation of a
pledge, the lock-in will be
applicable to the person in
favour of whom the shares
are pledged or to such
person to whom the shares
are transferred by a person
in favour of whom the
shares are pledged.
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Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
period stipulated in the ICDR 2018 has
expired.
47. Filing of the draft offer
document and offer
document
Regulation 8 (2) (d)
The ICDR 2009 required the certificate in
relation to the promoters contribution,
which is to be submitted by the lead
managers, to be obtained from a chartered
accountant.
Regulation 25 (9) (d) and Regulation
123 (9) (d)
The ICDR 2018 requires the certificate
in relation to the promoters contribution,
which is to be submitted by the lead
managers, to be obtained from a
statutory auditor.
1. In ICDR 2009, in relation
to IPOs it was Independent
Chartered Accountant who
certifies the promoters’
contribution but in ICDR
2018 it will be certified by
statutory auditor.
2. Further, both for IPOs and
FPOs, the certificate shall
now have to state the
amount paid as well as
credited.
48. Draft offer document and
offer document to be
available to public
Regulation 9 (3)
Included a similar provision, however, the
issuer was required to make a public
announcement either on the date of filing
the draft offer document or on the next
day.
Regulation 26 (2)
The ICDR 2018 provides that, within
two days of filing of the draft offer
document, an issuer is required to make
a public announcement in newspapers
disclosing the fact of filing of the draft
offer document, inviting the public to
provide their comments.
1. The time period for making
a public announcement in
the newspapers has now
been increased to two days.
49. Disclosure about the face
value of equity shares
Regulation 31 (2)
Included similar provision, however, the
ICDR 2009 also provided for inclusion of
a statement about the issue price being
‘X’ times of the face value.
Additionally, the provision related to the
Regulation 27
The ICDR 2018 provide that the
disclosure about the face value of equity
shares is required to be made in the draft
offer document, offer document,
advertisements and application forms,
along with the price band or the issue
1. Since both the face value
and price band are
disclosed through the
advertisement, disclosure
of this sentence is deleted.
However, requirement of
disclosure of face value
along with price is being
retained in the
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Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
manner in which the issuer could
determine the face value of equity shares
based on the issue price has been deleted.
price in identical font size. advertisement.
50. Price and price band Regulation 30 (2)
Required the issuer to announce the floor
price or price band 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.
Regulation 29 (4)
1. The floor price or the price band is
now required to be announced two
working days before the opening of the
issue.
2. Further, it can be done in the same
newspapers in which the pre-issue
advertisement was released or together
with the pre-issue advertisement in the
format prescribed under the ICDR 2018.
1. This change entails that the
issuer now has a reduced
time frame for announcing
the price band from five
working days to two
working days prior to the
opening of the issue, giving
the issuer more flexibility
to fix the price band.
2. Further, the ICDR 2018
now allows the issuer to
make this announcement
along with the pre-issue
advertisement, which is
issued after registering the
red herring prospectus (for
book built issues) or
prospectus (for fixed
issues).
51. Underwriting Regulation 13 (8)
The underwriting obligation to the extent
of entire hundred per cent of the offer
through offer document in case hundred
per cent of the offer was underwritten, is
deleted.
Regulation 40
The requirement for underwriting to the
extent of minimum subscription, which
is at least ninety per cent of the offer
through the offer document, except in
case of an offer for sale of specified
securities is retained.
1. Underwriting can now be
done only to the extent of
minimum subscription for
pure fresh issue and to the
extent of meeting the
public float requirements,
i.e., 10% or 25%. Thus,
underwriters do not need to
underwrite the entire offer
and can limit their
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Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
obligation to the extent of
minimum subscription.
52. Reservation on
competitive basis Regulation 42
The provision was similar, except that the
issuer could also make a reservation on
competitive basis in favour of the
following categories of persons:
shareholders (other than promoters) of:
listed group companies, in case of an
existing issuer.
Regulation 33
The issuer is now required to make
reservations on a competitive basis out
of the issue size excluding promoters’
contribution in favour of the following
categories of persons:
a) employees;
b) shareholders (other than promoters
and promoter group) of listed
subsidiaries or listed promoter
companies.
1. Unlike the ICDR 2009,
now employee refers
employee of “promoter”
and not “holding
company”.
2. Further, for the purposes
of reservation,
(i) shareholders of listed
group companies, and
persons associated with the
issuer or depositors,
bondholders or subscribers
to the services with the
issuer, have been
excluded, and (ii) the
shareholders of listed
subsidiaries have been
included.
3. Additionally, the
competitive reservation
under the ICDR 2018 does
not exclude net offer and
distinguish between new
issuer and old issuer.
53. Public advertisement Regulation 60
The provisions to be complied are the
same, except that currently, it is covered
in a separate schedule.
Regulation 42 (read with Schedule IX)
All public communication, publicity
materials, advertisements and research
reports shall comply with the provisions
of Schedule IX.
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No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
54. Minimum subscription Regulation 14 (2)
In the event of non-receipt of minimum
subscription, all application monies
received were required to be refunded to
the applicants, 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 not received within sixty
days of the closure of the issue.
Regulation 45 (2)
In the event of non-receipt of minimum
subscription, all application monies
received are now required to be
refunded to the applicants not later than
fifteen days from the closure of the
issue.
1. This change has been
made to align the period of
refund in case of non-
receipt of minimum
subscription with Rule 11
of the Companies
(Prospectus and Allotment
of Securities) Rules, 2014
without distinguishing
between underwritten and
non-underwritten issues
and uniformly provides for
15 days for any public
issue.
55. Period of subscription Regulation 46
(1) The requirement was the same, except
that the computation of ten days included
the days for which the issue is kept open
in case of revision in price band.
(2) The requirement is the same, except
that a proviso that the total bidding period
shall not exceed ten working days,
existed.
Regulation 46
(1) An initial public offer is now
required to be kept open for at least
three working days and not more than
ten working days.
(2) In case of a revision in the price
band, the issuer shall extend the bidding
(issue) period disclosed in the red
herring prospectus, for a minimum
period of three working days, subject to
the above.
(3) In case of force majeure, banking
strike or similar circumstances, the
issuer may, for reasons to be recorded in
writing, extend the bidding (issue)
period disclosed in the red herring
prospectus (in case of a book built issue)
or the issue period disclosed in the
1. Taking into consideration
that the period of
subscription may be
required to be extended due
to other factors such as force
majeure, banking strike,
bandh, etc. Accordingly, the
same is added as one of the
reasons under Regulation
46(3) for extension of period
of subscription irrespective
of change in price band.
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Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
prospectus (in case of a fixed price
issue), for a minimum period of three
working days, subject to the provisions
of sub-regulation (1).
56. Application and
minimum application
value
This provision was not included in the
ICDR 2009. Regulation 47 (1)
The maximum application by non –
institutional investor cannot exceed the
total number of securities offered in the
issue less the securities offered to
qualified institutional buyers.
-
57. Oversubscription Regulation 15
Provided a similar flexibility, except that
the upper limit was fixed at ten per cent of
the net offer.
Regulation 49 (2)
The issuer is not allowed to make any
allotment in excess of the specified
securities offered through the offer
document except in case of
oversubscription for the purpose of
rounding off to make allotment, in
consultation with the designated stock
exchange. In case of oversubscription,
an allotment of not more than one per
cent of the net offer to public may be
made for the purpose of making
allotment in minimum lots.
1. The provision for making
oversubscription is reduced
in the ICDR 2018 from
10% to 1% of the net offer
to the public only for the
purpose of making
allotment in minimum lots.
2. The ICDR 2018 now
necessitates an additional
involvement of the stock
exchanges by providing for
a consultation with them
for the said
oversubscription.
58. Allotment, refund and
payment of interest
Regulation 18 (2)
The ICDR 2009 required the issuer to pay
the issuer interest at such rate as specified
in the offer document.
Regulation 50 (3)
The ICDR 2018 requires the issuer to
pay an interest at the rate of fifteen per
cent per annum where the specified
securities are not allotted and/or
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Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
application monies are not refunded or
unblocked within the prescribed time.
59. Responsibility(ies) of
Lead Merchant
Banker(s)
Regulation 64 (4)
The responsibility of the lead merchant
banker was required to continue even
after the completion of issue process.
Regulation 52 (1)
The responsibility of the lead
manager(s) will continue until
completion of the issue process and for
any issue related matter thereafter.
1. The position is the same
and consistent with the
market practices. It is
more clarificatory under
the ICDR 2018. Adequate
carve outs in the draft red
herring prospectus / offer
document and offer
agreement should be
included.
60. Restriction on further
capital issues
Regulation 19
The requirement was the same, except
that it included a carve out for a fast track
issue and other issues. 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
monies.
Regulation 56
An issuer is not allowed to make any
further issue of specified securities in
any manner, except pursuant to an
employee stock option scheme, between
the date of filing the draft offer
document and the listing of the specified
securities offered, unless full disclosures
regarding the total number of specified
securities or amount proposed to be
raised are made.
1. The ICDR 2018 now
requires disclosure of
either the total number of
specified securities or the
amount proposed to be
raised in the pre-IPO
placement, which avoids
the disclosure of valuation
at draft red herring
prospectus stage.
2. The ICDR 2018 has carved
out issues made pursuant to
an employee stock option
scheme from the restriction
on further issues between
the date of filing the draft
offer document and listing
of the specified securities
offered through the offer
document or refund of
application monies.
3. Also, the ICDR 2018 has
moved the carve out for
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Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
fast track issues and other
issues under the relevant
chapters of the ICDR 2018.
3. Reference date -
Regulation 60
An issuer offering specified securities of
aggregate value of ten crore rupees or
more through a rights issue is required
to satisfy the conditions of Chapter III at
the time of filing the draft letter of offer
with SEBI and also at the time of filing
the final letter of offer with the stock
exchanges, as the case may be.
1. The ICDR 2018 has
clarified that the issuer is
required to comply with
the conditions in Chapter
III at both stages at the
time of offering specified
securities of an aggregate
value of ten crore rupees or
more through a rights
issue, i.e., at the time of
filing the draft letter of
offer with SEBI and also at
the time of filing the final
letter of offer with the
stock exchanges as
compared to the ICDR
2009, which did not
specify the said
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Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
requirement for rights
issue.
61. Rights Issue – Record
Date Regulation 52 (1)
The requirement was the same, except
that the same did not align with the
Securities and Exchange Board of India
(Listing Obligations and Disclosure
Requirements) Regulations, 2015.
Regulation 68 (1)
The issuer is required to announce a
record date for the purpose of
determining the shareholders eligible to
apply for specified securities in the
proposed rights issue for such period as
may be specified in the Securities and
Exchange Board of India (Listing
Obligations and Disclosure
Requirements) Regulations, 2015.
1. The requirement of
opening a rights issue for
subscription for a
minimum period of ten
days has been aligned with
the Securities and
Exchange Board of India
(Listing Obligations and
Disclosure Requirements)
Regulations, 2015 in the
ICDR 2018.
62. Rights Issue –
Underwriting Regulation 13 (1)
The requirement is the same, except that
the condition for the issue to be
underwritten only to the extent of
entitlement of shareholders other than the
promoters and promoter group was not
included.
Regulation 81 (1)
If the issuer entails to have the issue
underwritten, it is required to appoint
underwriters in accordance with the
Securities and Exchange Board of India
(Underwriters) Regulations, 1993,
provided that the issue can be
underwritten only to the extent of
entitlement of shareholders other than
the promoters and promoter group.
1. The ICDR 2018 has
clarified that a rights issue
can be underwritten only to
the extent of entitlement of
public shareholders and not
for the entitlement of the
promoters and promoter
group, which is consistent
with market practice.
63. Rights Issue – Fast Track
Issue Regulation 6 (1)
The issuer was required to file a draft
letter of offer with SEBI, irrespective if
the rights issue was a fast track issue or
not, along with fees as specified in
Regulation 71 (1)
Prior to making a rights issue, the issuer,
except in case of a fast track issue, is
required to file a draft letter of offer,
with the concerned regional office of the
1. The ICDR 2018 has now
clarified that filing of draft
letter of offer with SEBI is
not required in case of a
fast track rights issue,
although the fee will still
be required to be paid to
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No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
Schedule IV. Board under the jurisdiction of which
the registered office of the issuer
company is located, in accordance with
Schedule IV, along with fees as
specified in Schedule III, with the Board
and with the stock exchange(s), through
the lead manager(s).
the stock exchanges. The
requirement for filing a due
diligence checklist or cover
letter along with the filing
fees is still being discussed.
64. Rights Issue – ASBA Regulation 58 (5)
The regulation was the same, except that
it included an additional provision for
qualified institutional buyers and non-
institutional investors who could submit
their bids applications using the ASBA
facility only and the Retail individual
investors could either apply through
ASBA facility or make payment through
cheque or demand draft.
Regulation 76
The issuer is required to provide the
ASBA facility in the manner specified
by the Board where not more than one
payment option is provided, provided
that the applicants in a rights issue shall
be eligible to make applications through
ASBA facility only if such applicant:
(i) is holding equity shares in
dematerialised mode; (ii) has not
renounced entitlement in part or in full;
and (iii) is not a renouncee. Further,
payment for application for any reserved
portion outside the issue period can be
through electronic banking modes.
1. It is clarified in the ICDR
2018 that applicants in a
rights issue are required to
make applications only
through ASBA facility, if
they are holding equity
shares in dematerialized
mode, have not renounced
entitlement in part or in full
and are not renouncees.
2. Further, as per the ICDR
2018, payment for
application for any
reserved portion outside the
issue period can be through
electronic banking mode as
compared to ICDR 2009
wherein the retail
individual investors could
either apply through ASBA
facility or make payment
through cheque or demand
draft.
65. Rights Issue – Fast Track
Issue – Eligibility
conditions
Regulation 10 (1)(f)
The issuer was eligible to undertake a fast
Regulation 99 (m)
The provisions of “Filing of offer
1. Under the ICDR 2018, a
company to be eligible to
make a fast track rights
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
track issue if the impact of auditors’
qualifications on the audited accounts of
the issuer in respect of those financial
years for which such accounts wee
disclosed in the offer document did not
exceed five per cent of the net profit or
loss after tax of the issuer for the
respective years.
document”, “Security Deposit” and
“Documents to be submitted before
opening of the issue” will not be
applicable to a public issue or rights
issue if the issuer satisfies the following
condition:
There are no audit qualifications on the
audited accounts of the issuer in respect
of those financial years for which such
accounts are disclosed in the letter of
offer.
issue should not have any
audit qualifications, as
compared to the ICDR
2009 wherein such audit
qualifications were allowed
if they did not exceed 5%
of the net profit or loss
after tax of the issuer for
the respective financial
years.
66. Eligibility for qualified
institutions placement
Regulation 82
The only eligibility criterion for
undertaking a qualified institutions
placement was that a special resolution
approving the same be passed by its
shareholders, wherein it would specify
that the allotment is proposed to be made
through qualified institutions placement.
Regulation 172
A listed issuer is eligible to make a
qualified institutions placement of
eligible securities if it satisfies the
following conditions:
a) a special resolution approving the
qualified institutions placement has been
passed by its shareholders, however the
same would not be required in case the
qualified institutions placement is
through an offer for sale by promoters or
promoter group for compliance with
minimum public shareholding
requirements specified in the Securities
Contracts (Regulation) Rules, 1957;
b) The said allotment will have to be
completed within a period of 365 days
from the date of passing of the
resolution.
1. The ICDR 2018 removes
the requirement of
passing a special
resolution in case QIP is
through an offer for sale
by promoters or promoter
group for compliance
with minimum public
shareholding
requirements.
2. Further, an additional
eligibility criterion has
been included that none
of the promoters or
directors of the issuer is a
fugitive economic
offender.
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
c) An issuer shall be eligible to make a
qualified institutions placement if any of
its promoters or directors is not a
fugitive economic offender.
67. Conditions for offer for
sale by promoters for
compliance with
minimum public
shareholding
requirements specified in
the Securities Contracts
(Regulation) Rules, 1957
- Regulation 173
The promoters and members of the
promoter group may make an offer for
sale of fully paid up equity shares,
through a qualified institutions
placement, for the purpose of achieving
minimum public shareholding in terms
of the Securities Contracts (Regulation)
Rules, 1957, subject to the terms and
conditions specified therein.
1. Offer for sale by promoters
and members of promoter
group for compliance with
minimum public
shareholding requirements
has been added in the
ICDR 2018.
68. Appointment of
merchant banker - Regulation 174
It is now required that at least one lead
manager to the issue will not be an
associate (as defined under the
Securities and Exchange Board of India
(Merchant Bankers) Regulations, 1992)
of the issuer and in case it is, the same
shall be disclosed and its role shall be
limited to marketing of the issue.
1. The ICDR 2018 aligns
Regulation 21A of the
Securities and Exchange
Board of India (Merchant
Bankers) Regulations, 1992
by adding this additional
provision of at least one
lead manager not being an
associate of the issuer.
69. Placement Document Regulation 84
There was ambiguity as regards the said
obligation under Regulations 83(2) and
Regulation 174
The lead manager(s), while seeking in-
principle listing approval for the eligible
1. The ICDR 2018 has
combined Regulations
83(2) and 84(3) of the
ICDR 2009 and clarified
that the responsibility is
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Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
84(3) of the ICDR 2009. securities, is required to furnish to each
stock exchange on which the same class
of equity shares of the issuer are listed, a
due diligence certificate, and also
furnish a copy of the preliminary
placement document along with any
other document required by the stock
exchange.
on the lead manager(s).
The lead manager(s) may
now require back-to-back
letters and the said
change will be required to
be addressed in the cover
letter and the auditor
certificates.
70. Due diligence Regulation 83(1)
A qualified institutions placement shall be
managed by merchant banks registered
with SEBI who shall exercise due
diligence.
Regulation 175(1)
The lead managers to a qualified
institutions placement shall exercise due
diligence and shall satisfy themselves
with all aspects of the qualified
institutions placement including the
veracity and adequacy of disclosures in
the offer document.
-
71. Pricing – Regulation 176(1)
No shareholders’ approval will be
required in case of a qualified
institutions placement made through an
offer for sale by promoters for
compliance with minimum public
shareholding requirements specified in
the Securities Contracts (Regulation)
Rules, 1957.
1. This is in line with the
exemption from obtaining
shareholders’ approval for
qualified institutions
placements through offer
for sale by promoters /
promoter group to meet
minimum public
shareholding requirements.
72. Application and
Allotment Regulation 86
The restriction of downward revision was
not included.
Regulation 179
The applicants in qualified institutions
placement are not allowed to withdraw
or revise downwards their bids after the
closure of the issue.
1. An additional restriction on
downward revision of bids
has been inserted in the
ICDR 2018.
AZB & Partners Privileged and confidential
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
73. Qualified institutions
placement - Restrictions
on amount raised
Regulation 89
The aggregate of the proposed qualified
institutions placement and all previous
qualified institutions placements made by
the issuer in the same financial year could
not exceed five times the net worth of the
issuer as per the audited balance sheet of
the previous financial year.
No specific provision 1. Companies suffer losses for
a variety of reasons
including slowdown in
their sectors, which leads to
erosion of their net worth.
These companies, in the
process of turning around,
are unable to raise funds
through qualified
institutions placement as
their pre-QIP net worth will
be small or negative. As
such, these companies have
to look for other avenues
for fund raising which may
be time consuming and
expensive options.
Qualified institutional
buyer investors are in a
better position to evaluate
such opportunities and
qualified institutional
buyers also are not required
to be given any protection.
The said requirement is
deleted in the ICDR 2018.
74. Qualified institutions
placement - Minimum
number of allottees
Regulation 87 (2)
The term ‘same group’ was not defined.
Regulation 180 (2)
The term ‘same group’ is defined in the
explanation.
1. Given that the Companies
Act does not have
corresponding provisions
for Section 372 of the
Companies Act, 1956, the
definition of ‘same group’
has been added to bring
more clarity.
AZB & Partners Privileged and confidential
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
75. Qualified institutions
placement - Financial
Statements
Schedule XVIII (12)
The audited consolidated and standalone
financial statements are required to be
disclosed.
Schedule VII Clause (11)
The audited consolidated and standalone
financial statements for last three
financial years are required to be
disclosed. In addition, the latest
reviewed financials disclosed to the
stock exchanges have to be disclosed as
well.
1. The ICDR 2018 have
added that the latest
reviewed financials
disclosed to the stock
exchanges have to be
disclosed as well and has
specified that the audited
consolidated and
standalone financial
statements are required to
be disclosed for a period of
three years.
76. Qualified institutions
placement - Legal
proceedings
Schedule XVIII (19)
Legal proceedings
Schedule VII Clause (19)
Legal proceedings to be disclosed in
accordance with the materiality policy
framed under the Securities and
Exchange Board of India (Listing
Obligations and Disclosure
Requirements) Regulations, 2015.
1. SEBI has clarified that
legal proceedings are
required to be disclosed in
accordance with the
materiality policy
determined by the
Company.
77. Institutional Placement
Programme
CHAPTER VIII-A: INSTITUTIONAL
PLACEMENT PROGRAMME
No specific provision -
Schedule
78. Formats of Due
Diligence Certificates
The ICDR 2009 required five due
diligence certificates to be submitted by
the lead managers to SEBI in a period of
15-20 days at the following stages:
(i) Filing of the DRHP;
(ii) Issue opening;
The ICDR 2018 requires submission of
three due diligence certificates at the
following stages:
(i) Filing of the DRHP;
(ii) Registration of the offer document;
and
1. Since, the time gap
between filing of RHP,
opening and closing of
issue is too small, only if
there is any material
update during this period,
then only fresh due
AZB & Partners Privileged and confidential
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
(iii) Issue closing;
(iv) Filing of the prospectus; and
(v) Post-issue.
Accordingly, the requirement of
submission of certificates at issue opening
and issue closing stages have been deleted
in the ICDR 2018.
(iii) Post-issue.
In the event there is any significant
material development between the filing
of the offer document and the allotment
of securities, an additional due diligence
certificate is required to be submitted.
diligence certificate is
required.
2. In terms of the ICDR 2009,
five due diligence
certificates were required
to be submitted at the time
of a) filing of the DRHP,
b) issue opening and c)
issue closing, d) filing of
the prospectus and e) post-
issue.
3. However, under the ICDR
2018, only three due
diligence certificates are
required to be submitted at
the a) filing of the DRHP,
b) registration of the offer
document; and c) post
issue stages.
4. Further, in the event there
is any significant material
development between the
filing of the offer
document and the
allotment of securities, an
additional due diligence
certificate is required to be
submitted.
79. FORM A - Format of
due diligence certificate
to be given by the lead
manager(s) along with
draft offer document or
draft letter of offer
The ICDR 2009 required an enclosure of
a statement on price information of past
issues handled by merchant bankers
responsible for the issue to be included in
the due diligence certificate to be
submitted by the merchant bankers
alongwith the draft offer document.
The requirement for the statement on
price information of past issues handled
by the merchant bankers as part of the
due diligence certificate to be submitted
at the draft offer document stage has
been deleted under the ICDR 2018.
1. This requirement has been
deleted in order to avoid
duplication of submission
required in view of the
same being already
disclosed in the draft offer
document under Other
Regulatory and Statutory
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
Disclosures.
80. The ICDR 2009 required a certification
stating that the profits from related party
transactions have arisen from legitimate
business transactions of the issuer.
The ICDR 2018 requires the lead
managers to include the certification in
relation to related party transactions to
form part of the note explaining the due
diligence process exercised by the lead
managers. The note is required to state
that the related party transactions for the
period disclosed in the offer document
have been entered into by the issuer in
accordance with applicable law.
1. The requirement to obtain
a certificate has been
deleted in view of the
following:
(i) each RPT need not
result into profits for
the company; and
(ii) detailed disclosures
on RPTs are already
made in the offer
document in the
financial statements
of the company;
additional disclosures
on related parties are
included in the offer
document as they are
considered group
companies.
Schedule VIII - DISCLOSURES IN
OFFER DOCUMENT, ABRIDGED
PROSPECTUS AND ABRIDGED
LETTER OF OFFER
Schedule VI - DISCLOSURES IN
THE OFFER DOCUMENT,
ABRIDGED PROSPECTUS AND
ABRIDGED LETTER OF OFFER
81. Risk factors Clause IV (H) (1)
The ICDR 2009 required a disclosure of
any criminal charges under the Indian
penal Code and violation of securities
law, which has now been deleted.
- -
82. Clause IV (H) (6) - -
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Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
The ICDR 2009 required a disclosure of
in case the industry segment for which the
issue is proposed has contributed to less
than twenty five percent of the revenues
of the issuer in the previous three fiscals,
which has now been deleted.
83. Clause IV (H) (2)
The ICDR 2009 required disclosure of
risk relating to all statutory clearances and
approval that are yet to be received by the
issuer. This has now been amended to
include only the material statutory
clearances and approvals.
Clause 5 (G) (1)
Material statutory clearances and
approval that are yet to be received by
the issuer;
The ICDR 2009 required
disclosure of risk relating to all
statutory clearances and
approval that are yet to be
received by the issuer. This has
now been amended to include
only the material statutory
clearances and approvals. This
change is consistent with the
section ‘Government
Approvals’, where the
disclosures are provided for
material approvals.
84. Clause IV (H) (19)
The ICDR 2009 required the risk relating
to lack of experience to be disclosed only
in relation to the promoters of the issuer.
Clause 5 (G) (6)
Lack of significant experience of the
issuer or its promoters in the industry
segment for which the issue is being
made.
The ICDR 2018 now requires
the risk relating to lack of
experience for the issuer as
well.
85. - Clause 5 (G) (7)
If the issuer has incurred losses in the
last three financial years.
-
86. Clause IV (H) (8)
Similar provision under the ICDR 2009,
Clause 5 (G) (9)
Refusal of listing of any securities of the
This risk factor is now limited
to the issuer, its subsidiaries
and group companies, and does
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November 2018 AZB Capital Markets Update
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
however this has now been limited to a
period of ten years and only to the issuer,
its subsidiaries and group companies
under the ICDR 2018.
issuer or any of its subsidiaries or group
companies during last ten years by any
of the stock exchanges in India or
abroad.
not cover associates now.
Further, disclosure of historical
refusal of listing has been done
away with and now refusal of
listing in last 10 years is
required to be disclosed.
87. Clause IV (H) (12)
Similar provision under the ICDR 2009,
however this has now been limited to
issuer and its subsidiaries under the ICDR
2018. The disclosure for such risk for
promoter, group companies and
associated has now been deleted.
Clause 5 (G) (13)
Unsecured loans, if any, taken by the
issuer and its subsidiaries that can be
recalled at any time.
Under ICDR 2018, this risk
factor covers only (i) the issuer;
and (ii) its subsidiaries. ICDR
2009 required additional
coverage of promoter, group
companies and associates.
88. Clause IV (H) (13)
Similar provision under the ICDR 2009,
however this has now been clarified to be
included only for the issuer and its
subsidiaries under the ICDR 2018.
Clause 5 (G) (13)
Default in repayment of deposits or
payment of interest thereon by the issuer
and subsidiaries, and the roll over of
liability, if any.
The scope of the risk factor has
been clarified.
89. Clause IV (H) (15)
The ICDR 2009 did not prescribe any
specific time period of the risk factor
relating to the shortfall in performance
vis-à-vis the objects stated in any of the
previous issues, quantifying such
shortfalls or delays. Such risk was
required to be disclosed for the previous
issues of the issuer and group companies.
Clause (5) (G) (16) & (17)
The risk factor relating to the shortfall in
performance vis-à-vis the objects stated
in any of the issues made by for the
listed issuer or listed subsidiaries for ten
years and any of the listed promoters or
listed subsidiaries for five years,
quantifying such shortfalls or delays.
[AZB: Clause (5) (G) (16) sets out that
such risk is required to be disclosed for
the past ten years for the listed
1. A ten year time frame (for
listed issuer or listed
subsidiaries) or five years
(for listed subsidiaries or
listed promoters) for
disclosure of information
relating to previous issues
which have been
undertaken has been set
bearing in mind that the
information beyond that
period might not be
relevant to the prospective
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
subsidiary and Clause (5) (G) (17) sets
out that such risk is required to be
disclosed for the past five years. Thus
there is a discrepancy in the regulations
which needs to be clarified.]
investors.
2. Further, group companies
have been excluded from
the ambit of the risk factor
and its now limited to
listed subsidiaries, listed
promoters and listed issuer
only.
3. The risk factor does not
cover group companies
now but limited to listed
issuer, listed subsidiaries
and listed promoter(s).
4. The risk factor specifies a
time period for analysis
and disclosure of any
shortfall in performance
vis-à-vis objects, i.e. 10
years in case of listed
issuers and five years in
case of listed subsidiaries
or listed promoter(s).
Notably, the time period
prescribed under the
section “Other Regulatory
and Statutory Disclosures”
is not aligned with the risk
factor. In the back section,
following disclosure
requirement is prescribed:
(a) all issues by issuer in
last five years; and
(b) last one issue by listed
subsidiaries and listed
promoters in last five
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No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
years.
90. Clause IV (H) (16)
Similar provision under the ICDR 2009,
however this has now been limited to
promoter, directors or key managerial
personnel of the issuer under the ICDR
2018. The disclosure for such risk for
promoter, directors or key managerial
personnel of the group companies has
now been deleted.
Clause (5) (G) (19)
Any portion of the issue proceeds that is
proposed to be paid by the issuer to the
promoter, directors or key managerial
personnel of the issuer.
-
91. Clause (IV)(H)(24)
A summary of the outstanding litigations,
disputes, non-payment of statutory dues,
overdues to banks or financial
institutions, defaults against banks or
financial institutions, contingent liabilities
not provided for, the details of
proceedings initiated for economic
offences or civil offences (including the
past cases, if found guilty), any
disciplinary action taken by the SEBI or
recognized stock exchanges, etc.,
pertaining to the issuer, promoter and
wholetime directors of the issuer and
group companies, along with the nature of
the litigation, quantum of funds involved,
with a cross reference to the page where
the detailed disclosures have been made
in the offer document. If any the above-
mentioned litigations, etc., arise after the
filing the draft offer document, the facts
shall be incorporated appropriately in the
offer document.
Clause (5)(G)(24)
Summary of all outstanding litigations
and other matters disclosed in the
section titled ‘Outstanding Litigations
and Material Developments’ in a tabular
format along with amount involved,
where quantifiable. Issuer shall also
separately highlight any criminal,
regulatory or taxation matters which
may have any material adverse effect on
the issuer.
1. Disclosures pertaining to
litigation under risk factor
are consolidated and
aligned with the Litigation
chapter under Schedule VI
of ICDR 2018.
2. Certain line items were
deleted from Litigation
chapter vide SEBI (Issue
of Capital and Disclosure
Requirements) (Fourth
Amendment) Regulations,
2015. However,
corresponding changes
were not made under Risk
Factors under Schedule
VIII of ICDR 2009.
3. The ICDR 2009 required a
disclosure of any criminal
charges under the Indian
penal Code and violation
of securities law, which
has now been deleted.
4. The ICDR 2009 required a
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
Clause (IV)(H)(31)
All disputed or contested tax demands
and other government claims, along with
the disclosures of amount, period for
which such demands or claims are
outstanding, financial implications and
the status of the case.
disclosure of any criminal
charges under the Indian
penal Code and violation
of securities law, which
has now been deleted.
5. Further, under the ICDR
2018, any criminal,
regulatory or taxation
matter which may have
any material adverse effect
on the issuer are required
to be separately disclosed.
92. Clause IV (H) (27)
Similar provision under the ICDR 2009,
however this has now been limited to a
period of three financial years under the
ICDR 2018.
Clause (5) (G) (27)
Negative cash flow from operating
activities in the last three financial
years.
1. Risk factor on negative
cash flow has been
restricted to operating
activities for last three
years.
93. Clause IV (H) (28)
The ICDR 2009 required this disclosure
to be made in relation to any land which
is not registered in the name of the issuer.
Clause (5) (G) (28)
If the land proposed to be acquired from
proceeds of the issue is not registered in
the name of the issuer.
[AZB: The intent of the amended risk
factor is not clear as any land which is
proposed to be acquired will not be
registered in the name of the issuer as of
the date of the document]
1. Land proposed to be
acquired from issue
proceeds will not be
registered in the name of
the issuer till completion of
transaction. Thus, this risk
factor may be required to
be disclosed in every such
case.
2. Earlier, all other properties
which were not material
for business or operation
were required to be
disclosed under risk
factors, if not owned by the
issuer and are taken on
lease. Now the scope of the
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Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
risk factor has been
restricted to properties
proposed to be acquired
from issue proceeds.
94. Clause IV (H)(29)
The ICDR 2009 required a risk factor in
relation to the lack of arrangement in
terms of borrowings or working capital
requirements from banks or financial
institutions to be disclosed.
The risk factor has been deleted. -
95. Clause IV (H) (32)
Similar provision under the ICDR 2009,
however, it has been clarified that such
disclosure is to be made only for the
issuer, listed subsidiaries and top 5 listed
group companies by market
capitalization. The ICDR 2009 required
this to be disclosed for the issuer and
other listed companies under the same
management within the meaning of
section 370 (1B) of the Companies Act,
1956.
Clause (5) (G) (30)
Existence of a large number of pending
investor grievances against the issuer,
listed subsidiaries and top 5 listed group
companies by market capitalisation.
It has been clarified that such
disclosure is to be made only
for the issuer, listed
subsidiaries and top 5 listed
group companies by market
capitalization.
96. Offer Document
Summary
Clause (V)
The section on “Prominent Notes” has
been deleted. However, similar
disclosures have been covered under
various sections of the ICDR 2018 which
are stated below:
a. Net worth for the past three years (as
per the restated consolidated
Clause (4)
The section “Prominent Notes” has been
deleted and a new section, “Offer
Document Summary”, has been included
in the ICDR 2018 which requires the
issuer to set out a summary of the
following, additional information, as
applicable:
1. The new section "Offer
Document summary"
provides a summary of
the important information
for investors to take an
informed decision.
2. The ICDR 2009 required
the networth to be
disclosed before the issue
and issue size as per the
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Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
financial statements) and stub period
is required to be disclosed under
“Offer document summary”.
b. Cost of acquisition of share for
promoter and selling shareholder.
c. Business interest of group
companies in the issuer and the
amount of commercial business that
the said company has or proposed to
have with the issuer is required to be
disclosed under “Information with
respect to group companies”.
d. Summary of related party
transactions for last three years and
cross-reference to related party
transactions as disclosed in the
restated financial statements is
required to be disclosed under
“Offer document summary”.;
e. Details of change in name are
required to be disclosed in the offer
document and a cross reference to
the same is required to be disclosed
on the cover page.
f. Disclosure pertaining to financing
arrangements for purchase of
securities of the issuer for the period
of six months immediately
preceding the date of the draft offer
document/ offer document is
required to be disclosed under “offer
document summary”.
The following disclosure from prominent
notes has been deleted:
Disclosure to the effect that the investors
1. Primary business of the issuer and
the industry in which it operates, in
not more than 100 words each;
2. Names of the promoters;
3. Size of the issue disclosing
separately size of the fresh issue
and offer for sale;
4. Objects of the issue in a tabular
format;
5. Aggregate pre-issue shareholding
of the promoter and promoter
group, selling shareholder(s) as a
percentage of the paid-up share
capital of the issuer;
6. Following details as per the
restated consolidated financial
statements for past 3 years and
stub period in tabular format:
a. Share capital;
b. Net worth;
c. Revenue;
d. Profit after tax;
e. Earnings per share;
f. Net asset value per equity share;
and
g. Total borrowings (as per balance
sheet).
7. Auditor qualifications which have
not been given effect to in the
restated financial statements.
audited financial
statements. This has now
been broadened to
include networth for past
three years and the stub
period.
3. The ICDR 2009 required
the cost per share to
promoters and book value
to be disclosed. This has
now been limited to the
average cost of
acquisition. Further, this
disclosure is now
required to be given for
the selling shareholder as
well.
4. The ICDR 2009 required
that the related party
transactions with group
companies and
subsidiaries to be
disclosed for the last year.
This has now been
extended to include all
related party transactions
for the last three years.
5. The ICDR 2009 required
a separate disclosure for
change in name of the
issuer, the reason for such
change alongwith any
corresponding changes to
the objects clause of the
memorandum of
association to be included
under prominent notes.
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Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
may contact any of the merchant bankers
who have submitted the due diligence
certificate to the Board, for any complaint
pertaining to the issue".
8. Summary table of outstanding
litigations and a cross-reference to
the section titled ‘Outstanding
Litigations and Material
Developments’.
9. Cross-reference to the section
titled ‘Risk Factors’.
10. Summary table of contingent
liabilities and a cross-reference to
contingent liabilities of the
issuer as disclosed in restated
financial statements.
11. Summary of related party
transactions for last 3 years and
cross-reference to related party
transactions as disclosed in
restated financial statements.
12. Details of all financing
arrangements whereby the
promoters, members of the
promoter group, the directors of
the company which is a promoter
of the issuer, the directors of the
issuer and their relatives have
financed the purchase by any other
person of securities of the issuer
other than in the normal course of
the business of the financing entity
during the period of six months
immediately preceding the date of
the draft offer document/offer
document.
This has deleted as the
same is already included
under “History and
corporate structure of the
issuer”.
6. Sub-section “Prominent
Notes” deleted and a new
section giving a summary
of the offer document has
been added.
7. Disclosure of cost of
acquisition for selling
shareholders is
mandatory now.
8. Now, in addition to the
cost of acquisition,
weighted average price at
which specified security
was acquired by each of
the promoters and selling
shareholders in the last
one year is also required
to be disclosed.
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Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
13. Weighted average price at which
specified security was acquired by
each of the promoters and selling
shareholders in the last one year.
14. Average cost of acquisition of
shares for promoter and selling
shareholders.
15. Size of the pre-IPO placement and
allottees, upon completion of the
placement
16. Any issuances of equity shares
made in the last one year for
consideration other than cash.
17. Any split/consolidation of equity
shares in the last one year.
97. Green Shoe Option Clause VI (C) (3)
The ICDR 2009 required the issuer to
disclose the period for which the issuer
proposes to avail of the stabilisation
mechanism.
Clause 7 (Q) (c)
The ICDR 2018 requires the issuer to
disclose the maximum period for which
the issuer proposes to avail of the
stabilization mechanism and in case the
issuer proposes to close the stabilisation
mechanism prior to the maximum
period, a disclosure to that effect is
required to be made.
1. The provision has been
altered and provides
flexibility to an issuer to
close the stabilisation
earlier in the event it
believes that the price has
already stabilised and no
further intervention is
required.
98. Capital structure Clause (VI) (D)(o)(i)
The ICDR 2009 required the issuer to
disclose the ten largest shareholders as on
the date of registering the offer document
Clause 8 (B) (f) (i)
The ICDR 2018 requires the issuer to
disclose the names of the shareholders of
the issuer holding 1% or more of the
1. To align it with the
requirements under the
SEBI LODR Regulations.
2. Disclosure of major
shareholders is on the basis
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Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
with the Registrar of Companies.
paid-up capital of the issuer as on the
date of filing of the draft offer
document/ or end of last week from the
date of draft letter of offer and the offer
document, as the case may be, provided
that details of shareholding aggregating
at least 80% of capital of company are
disclosed.
of persons holding 1% or
more of the paid-up capital
instead of top 10
shareholders.
99. There was no requirement of disclosure of
the exercise price under the ICDR 2009. Clause 8 (B) (p) (iv)
The ICDR 2018 requires the issuer to
disclose the exercise price in relation to
options granted to employees in
pursuance of any employee stock option
scheme prior to the initial public offer,
which are outstanding at the time of the
initial public offer.
1. The ICDR 2018 now
requires a disclosure of the
exercise price of the
options granted. The
disclosures in relation to
ESOPs aligned with the
applicable accounting
standards for ESOPs/
guidance note from ICAI.
100. Similar provision under the ICDR 2008.
However, options granted to senior
management personnel were required
instead of key managerial personnel.
Further, the intention of holders of equity
shares to sell equity shares which have
been allotted pursuant to exercise of
options within three months after listing
has now been limited to key managerial
personnel and whole-time directors only.
Clause 8 (B) (p) (x)
The ICDR 2018 requires the issuer to
disclose the details of options granted
and shares issued to key managerial
personnel. The ICDR 2018 also requires
the issuer to disclose the intention of key
managerial personnel and whole time
directors to sell their equity shares
within three months after the date of
listing.
1. The disclosures in relation
to ESOPs aligned with the
applicable accounting
standards for ESOPs/
guidance note from ICAI.
101. Clause (VI) (D)(r)(xiii)
The ICDR 2009 required disclosure of the
weighted average exercise prices and
weighted average fair values of options
whose exercise price either equals or
- 1. The ICDR 2018 have
omitted the disclosure in
relation to weighted
average exercise prices and
weighted average fair
values of options whose
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Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
exceeds or is less than the market price of
the stock, which has now been deleted.
exercise price either equals
or exceeds or is less than
the market price of the
stock. The disclosures in
relation to ESOPs aligned
with the applicable
accounting standards for
ESOPs/ guidance note
from ICAI.
102. Business Strategy Clause VIII (B) (2)(b)
The issuer was required to disclose a brief
statement about future prospects under the
ICDR 2009.
- 1. The ICDR 2018 has
omitted this disclosure.
103. History and Certain
Corporate Structure of
the Issuer
Clause VIII (D) (1) (a)
Similar provision under the ICDR 2009.
Clause 10 (D) (1) (c)
Main objects as set out in the in the
memorandum of association of the
issuer and dates on which the
memorandum of association was
amended, citing the details of such
amendments for the last ten years.
1. Disclosure of amendments
in MOA has been
restricted to last 10 years
(as opposed to disclosure
of the same since
incorporation).
104. Clause VIII (D) (1) (G)
Similar provisions under the ICDR 2009.
Clause 10 (D) (1) (c)
Details regarding material acquisitions
or divestments of business /
undertakings, mergers, amalgamation,
any revaluation of assets etc., if any, in
the last ten years.
1. ICDR 2018 requires
disclosure of material
acquisitions or divestments
of business / undertakings,
mergers, amalgamation,
any revaluation of assets
etc., if any.
2. Aforesaid disclosure is
subject to time cap of last
ten years.
3. Disclosures related to
divestments were not
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Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
required under the ICDR
2009.
105. Clause (VIII)(D)(1)(c)and (3)
The ICDR 2009 required complete details
of the subsidiaries and holding company,
if applicable, to be disclosed.
Further, the following details of the
subsidiary of the issuer were required to
be disclosed.
(a) Name of the subsidiary;
(b) nature of business;
(c) capital structure;
(d) shareholding of the issuer;
(e) amount of accumulated profits or
losses of the subsidiary(ies) not accounted
for by the issuer;
Clause (10)(D)(3)
The following details of the joint
ventures in addition to the details of the
holding company,
subsidiary/subsidiaries are required to be
disclosed under the ICDR 2018 -
(a) Name of the holding
company/subsidiary/joint venture;
(b) nature of business;
(c) capital structure;
(d) shareholding of the issuer;
(e) amount of accumulated profits or
losses of the subsidiary(ies) not
accounted for by the issuer.
In addition to subsidiaries, the
details of joint ventures is also
required to be disclosed.
106. Shareholders'
agreements and other
agreements
Clause VIII (D) (4)
Similar disclosure requirements under the
ICDR 2009.
Clause 10 (E) (b):
The ICDR 2018 requires the issuer to
disclose key terms of shareholders’
agreements, agreements entered into by
key managerial personnel or director or
promoter or any other employee of the
issuer with any shareholder or third
party with regard to compensation or
profit sharing in connection with
dealings in the securities of the issuer,
guarantees given by promoter offering
its shares in the proposed offer for sale
and material agreements including with
strategic partners, joint venture partners
and/or financial partners, entered into,
other than in the ordinary course of
1. The ICDR 2009 did not
require disclosure of
agreements entered into by
a key managerial personnel
or director or promoter or
any other employee of the
issuer, either by
themselves or on behalf of
any other person, with any
shareholder or any other
third party with regard to
compensation or profit
sharing in connection with
dealings in the securities of
the issuer.
2. This disclosure
requirement has been
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Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
business of the issuer. inserted to align with the
requirements under SEBI
LODR Regulations, which
require board and
shareholders’ approval for
entering into such an
agreement.
3. This will impact the
arrangements typically
between Promoters and
Investors, wherein profits
or compensation are made
dependent on dealings in
the securities, which were
also generally being
disclosed under the section
‘History and Certain
Corporate Matters’.
4. If any such arrangement
persists on listing of
equity, then board and
shareholders’ approval
shall be obtained post
listing.
5. Agreements entered into
by a KMP with any
shareholder or any other
third party for
compensation or profit
sharing in connection with
dealings in the securities of
the issuer is categorized as
a material agreement,
which would now have to
be made available for
inspection.
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Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
107. Clause (VIII)(D)(5)
The ICDR 2009 required the details of
every other material contract (not entered
into the ordinary course of business for
more than two years before the date of
filing the offer document) such as date,
parties and general nature to be
disclosed.
Clause (10)(E)(d)
ICDR 2018 requires the disclosure of
key terms of the subsisting material
agreements, in addition to the dates,
parties to and general nature of the
contract, entered into other than in the
ordinary course of business of the issuer,
including with strategic partners, joint
venture partners and/or financial
partners.
1. Details of all subsisting
material agreements (not in
the ordinary course of
business) will require to be
disclosed, instead of
agreements entered in two
years under ICDR 2009.
2. The disclosure on material
contracts should only be
restricted to the standard
practice of including
shareholder specific and/or
business rearrangement
agreements, including,
shareholders’ agreement,
short summary of share
purchase agreements, joint
venture agreement and
business transfer
agreements.
108. – Clause (10)(G)(j)
Brief details of material guarantees, if
any, given to third parties by the
promoters with respect to specified
securities of the issuer.
1. In addition to disclosure of
guarantees given by the
promoter selling
shareholders, the ICDR
2018 required disclosure of
details of material
guarantees given to third
parties by the promoters
with respect to specified
securities of the issuer
irrespective of whether the
promoters are selling
shares in the IPO.
109. Management Clause (VIII) (E) (4) (a) (ii)
Clause (10) (F) (d) (i)
1. The ICDR 2018 requires
the issuer to disclose the
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Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
Similar disclosures were required under
the ICDR 2009.
The ICDR 2018 requires disclosure of
the nature and extent of interest, if any,
of every director in the issuer, including
in any property acquired or proposed to
be acquired of the issuer or by the issuer
or in the promotion or formation of the
issuer.
interest of directors in
property acquired by the
issuer. The ICDR 2009 had
prescribed a period of two
years preceding the date of
the offer document in
relation to this disclosure
which has now been
deleted.
110. Clause VIII (E) (7)
Previously under ICDR 2009, a disclosure
stating that the statement of compliance
has been made in accordance with the
Listing Agreement was to be included.
Previously, the details such as names of
the members and the terms of reference of
the stakeholders’ relationship committee
and the risk management committee (if
applicable) were not required to be
disclosed in addition to the audit
committee and remuneration committee.
Clause 10 (F) (g)
A statement that the issuer has complied
with the requirements of corporate
governance relating to the composition
of its board of directors, constitution of
committees such as audit committee,
nomination and remuneration
committee, stakeholders relationship
committee, as provided under Securities
and Exchange Board of India (Listing
Obligations and Disclosure
Requirements) Regulations, 2015
(“SEBI LODR Regulations”) is
required to be included.
The details of stakeholder’s relationship
committee and risk management
committee have to be mentioned
additionally along with the audit
committee and remuneration committee.
1. The names of the members
and the terms of reference
of the stakeholders’
relationship committee and
the risk management
committee are required to
be disclosed in addition to
the audit committee and
remuneration committee.
2. SEBI has now clarified
that details of only
committees as required
under the SEBI LODR
Regulations are required to
be disclosed. The practice
earlier, in some occasions,
was to extend the
disclosures to other board
of directors appointed
committees as well.
111. Promoters / principal
shareholders
Clause (F) (1) (a)
In addition to the other disclosures, the
voter id number of the Promoter was
required to be disclosed under the ICDR
Clause (G) (a) (i)
The following details in relation to the
promoter have to be disclosed under
ICDR 2018:
1. The ICDR 2018 has deleted
the disclosure in relation to
voter id number of the
Promoter.
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Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
2009.
i) Permanent Account Number;
ii) Aadhaar card number;
iii) Complete profile (including name,
date of birth, age, personal address,
educational qualifications,
experience in business, positions
held in past, directorship held, other
ventures of promoter, special
achievement, business and financial
activities);
iv) Photograph; and
vii) Driving license number.
112. Clause (F) (8)
The requirement to disclose the nature
and extent of interest of the promoters,
directors and group companies in any
property acquired by the issuer was
limited to the preceding two years under
the ICDR 2009.
Clause (G) (h)
The nature and extent of interest of the
promoters, directors and group
companies in any property acquired by
the issuer in the preceding three years is
required to be disclosed under the ICDR
2018.
1. The ICDR 2018 has
increased the period for the
disclosure in relation to the
interest of the promoters,
directors and group
companies in any property
acquired by the issuer from
two to three years.
However, the section
Management does not
prescribe any time cap on
this disclosure vis-à-vis
directors.
113. The disclosure pertaining to the list of
promoter group individual and entities
was not required to be disclosed under the
ICDR 2009.
Clause (G) (k)
A list of all individuals and entities
forming part of the promoter group has
to be disclosed under the ICDR 2018.
1. In certain cases, where
such disclosure was not
included in the draft offer
document or the offer
document, it was included
in the SEBI cover letter
filed at the time of
submitting the draft offer
document with SEBI.
SEBI has now instructed
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Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
that this information be
included in the draft offer
document and the offer
document itself.
114. Objects of the Issue - Clause 9 (A)(2)
If one of the objects of the issue is loan
repayment:
(a) details of loan proposed to be repaid
such as name of the lender, brief
terms and conditions and amount
outstanding;
(b) certificate from the statutory auditor
certifying the utilization of loan for
the purpose availed.
1. ICDR 2018 provide for a
new requirement for
disclosure of details of
loan proposed to be repaid
of issue proceeds.
2. Requirement of obtaining a
certificate is specified to be
from statutory auditors,
which earlier was obtained
from Independent CA.
115. Clause (VIII) (B)(6)(a)
In ICDR 2009, the names of the entities
from whom the land has been acquired/
proposed to be acquired along with the
cost of acquisition, relation, if any, of
such entities to any promoter or director
of the issuer was required to be disclosed.
Clause (9)(A)(6)
In ICDR 2018, a similar disclosure is
required in the event of proceeds from
the issue being utilized for the
acquisition of land.
1. ICDR 2018 provides for
disclosure regarding
acquisition of land if in
case the proceeds of the
issue are being utilized for
acquisition of land.
116. Clause (VIII)(B) (5)
ICDR 2009 required the following
disclosures in relation to the purchase of
property –
(a) In respect of any property referred to
in sub-clause (b):
i) the names, address, descriptions
and occupations of the vendors;
ii) the amount paid in cash, shares
Clause (9)(A)(8)
ICDR 2018 provides for similar line
items as included in ICDR 2009, except
for exceptions which are now deleted
under ICDR 2018.
1. Disclosure for all the
properties to be acquired
from issue proceeds shall
be disclosed in the offer
documents.
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Remarks
or debentures to the vendor
specifying the amount paid or
payable for goodwill;
iii) the nature of the title or interest
in property;
iv) details of the transaction
alongwith the relating to the
property completed within the
two preceding years;
(b) the property to which sub-clause (a)
is applicable to the property
purchased or acquired by the issuer
which is to be paid for wholly or
partly out of the proceeds of the issue
offered for subscription by the offer
document or the purchase or
acquisition of which has not been
completed at the date of issue of the
offer document other than property:
(i) the contract for the purchase or
acquisition whereof was entered into
in the ordinary course of the issuer’s
business, the contract not being made
in contemplation of the issue nor the
issue in consequence of the contract;
or
(ii) as respects which the amount of
the purchase money is not material.
a. for the purpose of this clause,
where a vendor is a firm, the
members of the firm shall not be
treated as separate vendors;
b. if the issuer proposes to acquire a
business which has been carried
on for less than three years, the
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Regulations, 2018 (“ICDR 2018”)
Remarks
length of time during which the
business has been carried.
117. Clause (IX)(B)(4) and (5)
The following criteria were applicable if
the proceeds of the issue of the shares or
debentures were to be applied in the
purchase of business and in the purchase
of any interest in any business –
(i) the profits or losses of the business of
each of the five financial years
immediately preceding the issue of the
offer document; and
(ii) the assets and liabilities of the
business at the last date to which the
accounts of the business were made up,
being a date not more than one hundred
and twenty days before the date of the
issue of the offer document.
Clause (11)(I)(B)(ii)
The ICDR 2018 modified the criteria for
the utilisation of issue proceeds for
acquisition of one or more material
businesses or entities as follows –
(i) audited balance sheets, profit and
loss, cash flow for the latest three
fiscals and stub period (if available)
prepared as per framework
applicable to the business or
subsidiary proposed to be acquired,
in the offer document.
(ii) the proposed acquisition (covering
all businesses or subsidiaries
proposed to be acquired) shall be
considered material if it will make
20% or more contribution in
aggregate to either turnover, or net
worth or profit before tax of the
issuer, on a consolidated basis, as
per the latest financial information.
-
118. Particulars of Issue Clause (VII)(L)
Tax Benefits: Any special tax benefits for
the issuer and its shareholders.
Clause (9)(L)
Any special tax benefits (under direct
and indirect tax laws) for the issuer and
its shareholders and its material
subsidiaries identified in accordance
with the Securities and Exchange Board
of India (Listing Obligations and
Disclosure Requirements) Regulations,
2015.
1. ICDR 2018 requires
inclusion of special tax
benefits to the material
subsidiaries in addition to
the issuer and its
shareholders.
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No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
119. Clause (VII)(K)(1)
The ICDR 2009 required the disclosure in
relation to the basis for issue price, floor
price or price band.
Clause (9)(K)(1)
The ICDR 2018 now requires the
disclosure in relation to the basis for
issue price, floor price or price band on a
consolidated basis.
-
120. Dividend Policy Clause (H)
The precise disclosures related to
dividend were not provided under the
ICDR 2009.
Clause (H)
Details of the policy such as mode of
payment of dividend, dividend paid in
last three financial years and stub period
along with the dividend paid in the
period between the last audited period
and date of filing the draft offer
document / draft letter of offer and offer
document is required to be disclosed.
1. Under ICDR 2018,
dividends only for the last
three years and stub period
prior to the date of the
document are to be
disclosed.
121. Financial Statements
Clause (IX) (B) (1)
Financial statements for five years and
stub period (if applicable) had to be
disclosed under ICDR 2009.
Clause (11) (I) (A) (i)
Consolidated financial statements for
three years and stub period (if
applicable) have to be disclosed under
the ICDR 2018.
In accordance with Ind AS 34, complete
consolidated financial information shall
be provided for stub period but the
issuer is exempt from presenting
comparatives for the stub period but has
an option to present the comparatives for
the stub period as well.
1. SEBI has now stated clearly
that the determination is
done purely on the basis of
consolidated financial
statements. Earlier, there
was no clarity and,
conservatively, analysis
would happen on both
standalone and consolidated
basis.
2. The disclosure requirements
under ICDR 2018 in
relation to the financial
statements have been
limited to a period of three
years and stub period, if
applicable.
AZB & Partners Privileged and confidential
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
122. Clause (IX) (B) (23)
The proforma financial statements under
ICDR 2009, were required to be prepared
if the total book value of the assets of the
acquired / divested entity amounted to
more than 20% of the pre – acquisition /
pre – divestment book value of the assets
or the total income of the acquired /
divested entity amounted to more than
20% of the pre – acquisition / pre –
divestment of the total income of the
company.
Clause (11) (I) (B) (iii)
The proforma financial statements are
required to be prepared under ICDR
2018, if the acquired / divested business
or subsidiary in aggregate contributes to
20% or more of turnover, networth or
profit before tax in the latest annual
consolidated financial statements of the
company.
1. The ICDR 2018 has
changed the criteria for the
preparation of proforma
financial statements to now
include turnover, networth
or profit before tax in the
latest annual consolidated
financial statements of the
company.
2. SEBI has now stated clearly
that the determination is
done purely on the basis of
consolidated financial
statements. Earlier, there
was no clarity and,
conservatively, analysis
would happen on both
standalone and consolidated
basis.
3. Earlier, proforma test had to
be done on the basis of
acquisition or divestment
made after the end of the
latest annual financial
results, even if stub period
thereafter was being
included in the DRHP.
ICDR 2018 now applies the
test only if such acquisition
or divestment is done post
the financial statements
disclosed in the
DRHP/RHP.
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
4. SEBI has now specifically
allowed companies to
voluntarily add pro forma
statements even where it
not triggered.
5. Further, in case of non-
material acquisitions /
divestments disclosures in
relation to the fact of the
acquisition / divestment,
consideration paid/received
and mode of financing shall
be certified by the statutory
auditor of the issuer
company.
6. The ICDR 2018 expressly
permits inclusion of
comparatives for stub
period also in the offer
document (on an optional
basis), thereby providing
the flexibility to include
discussion on the stub
period in the MD&A as
well.
123. Outstanding
Litigations and
Material Developments
The ICDR 2009 did not require a separate
disclosure in relation to penalty imposed
or action outstanding by SEBI or stock
exchanges against the promoters in the
last five financial years. However, the
disclosure of outstanding actions by SEBI
or stock exchanges was required to be
disclosed under actions by statutory or
regulatory authorities.
Clause (12) (A) (1) (iii)
The litigation involving issuer, director,
promoter, group companies,
subsidiaries.
The following litigation for the above
parties is required to be disclosed:
1. Earlier the disclosure
requirement was required
for issuer, its directors,
promoters, group
companies and
subsidiaries. ICDR 2018
has deleted the requirement
for group companies and
now litigation disclosure
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
a. Criminal proceedings;
b. All actions by regulatory and
statutory authorities;
c. Disciplinary actions including
penalty imposed by SEBI or stock
exchanges against the promoters in
the last five financial years;
d. Tax proceedings;
e. Other pending litigation as per the
materiality policy of the issuer.
for group companies is
restricted to outstanding
litigations which have a
material impact on the
issuer.
2. The ICDR 2018 has
included an additional
disclosure in relation to the
disciplinary action
including the penalty
imposed or action
outstanding by SEBI or
stock exchanges against the
promoters in the last five
financial years. This
requirement was in the risk
factor section in the ICDR
2009, which did not
prescribe any time frame
and was required for issuer,
promoters, whole time
directors and group
companies.
124. Clause (X) (A) (2) (iii)
Similar disclosures were required under
ICDR 2009. However, only the
outstanding dues to the creditors were
required to be disclosed on the website of
the issuer.
Clause (12) (A) (2) (iii)
ICDR 2018 requires the following
details to be disclosed:
a. The consolidated number of
creditors and the aggregate amount
involved based on the materiality
policy of the issuer;
b. Outstanding dues to micro, small
and medium enterprises and other
creditors;
c. The complete details of the
1. The requirement to disclose
details of outstanding dues
on the website of the issuer
has been reduced to
outstanding overdues to
material creditors.
2. The disclosure requirement
in the offer documents is
for outstanding dues
whereas the disclosure
requirement on the website
is for outstanding overdues.
AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
outstanding overdues to material
creditors alongwith the name and
amount involved with a link to the
website of the company.
125. Government Approvals Clause (X) (B)
All the government and other approvals
including the technical approvals were
required to be disclosed under the ICDR
2009.
Clause (12) (B) (2)
The government and other approvals
which are material for the company and
for its material subsidiaries are required
to be disclosed including investment
approvals, letters of intent or industrial
licenses, declarations from statutory or
regulatory authorities about the non-
responsibility of financial soundness or
correctness of the statements.
1. The scope of related to
government approvals has
now been reduced to
material approvals for the
company and only for its
material subsidiaries.
126. Information with
respect to the group
companies
Clause (IX) (C)
The financial information was required to
be given for every group company which
had become sick industrial company or
was under winding up or had negative
networth under ICDR 2009.
Clause (13)
Financial information of sick group
company, company under winding up or
company with negative networth is not
required to be disclosed under ICDR
2018.
-
127. Clause (IX) (C) (i)
ICDR 2009 required disclosure of the
highest and lowest market price of shares
of listed group companies, the change in
capital structure during the period and the
market value on the date of registering the
offer document with the Registrar of
Companies.
Clause (13) (A) (ix)
ICDR 2018 requires an issuer to disclose
only the highest and lowest market price
of shares during the preceding six
months for listed group companies.
-
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
128. Clause (IX) (C) (j)
Under the ICDR 2009, if a group
company had made any public or rights
issue in preceding three years, the issue
price of the security, the current market
price, particulars of changes in the capital
structure, if any, since the date of issue
and a statement regarding the cost and
progress of implementation of the project
in comparison with the cost and
implementation schedule was required to
be disclosed.
Clause 13(A) (x)
The ICDR 2018 requires disclosure of
only the issue price of the security and
the current market price of the securities
of the listed group company who had
made public or rights issue.
1. The disclosure pertaining
to the particulars of
changes in the capital
structure since the date of
issue and a statement
regarding the cost and
progress of implementation
of the project in
comparison with the cost
and implementation
schedule is no longer
applicable.
129. Clause (IX) (C) (5)
Sales or purchases between the group
companies / subsidiaries / associate
companies exceeding 10% in aggregate of
the total sales or purchases of the
company was required to be disclosed.
There is no requirement under the ICDR
2018 to disclose the sales or purchases
between group companies / subsidiaries
/ associate companies exceeding in
aggregate 10% of the total sales or
purchases of the company.
-
130. Clause (X) (A) (1)
Litigations involving the group
companies were required to be disclosed
in the same manner as required in relation
to the issuer under ICDR 2009.
Clause (13) (D)
ICDR 2018 requires only the litigations
having material impact on the company
to be disclosed.
1. The requirement to
disclose litigation in
relation to group
companies has been
reduced to such litigation
which has a material
impact on the issuer.
131. Other Regulatory and
Statutory Disclosures
Clause (XI) (B)
The disclosure pertaining to prohibition
from accessing the capital markets or the
debarment from buying, selling or dealing
in securities under any order or direction
passed by the SEBI or any securities
market regulator in any other jurisdiction
Clause (14) (B)
The disclosure pertaining to prohibition
from accessing the capital markets or the
debarment from buying, selling or
dealing in securities under any order or
direction passed by the SEBI or any
securities market regulator in any other
1. The ICDR 2018 has
extended the disclosure
pertaining to the
debarment of the
company, promoter,
promoter group, directors
and persons in control of
the company to selling
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No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
or any other authority/court was limited
only to the company, promoter, promoter
group, directors and persons in control of
the company.
jurisdiction or any other authority/court
of the company, promoter, promoter
group, directors and persons in control
of the company has now been extended
to selling shareholders as well.
shareholders as well.
132. The disclosure with respect to Companies
(Significant Beneficial Ownership) Rules,
2018 was not required to be included.
Clause (14)(C)
The disclosure pertaining to the
compliance by the promoters, promoters
group or selling shareholders with the
Companies (Significant Beneficial
Ownership) Rules, 2018 is required to
be included.
1. In ICDR 2009, the
disclosure with respect to
Companies (Significant
Beneficial Ownership)
Rules, 2018 was not
required to be included.
However the same has
been added in ICDR 2018.
2. It may be noted that in
terms of Rule 8 of the SBO
Rules, the said rules do not
apply to the holding of
shares of companies/body
corporates, in case of
pooled investment
vehicles/investment funds
such as Mutual Funds,
Alterative Investment
Funds (AIFs), Real Estate
Investment Trusts (REITs)
and Infrastructure
Investment Trusts (InvITs)
regulated under SEBI Act.
Therefore, these rules may
not apply to every selling
shareholder.
133. Clause (XI) (C)
The confirmation with respect to the
association of the directors with the
Clause (14) (D)
The confirmation with respect to the
association of the directors with the
1. In the ICDR 2018, the
confirmation with respect
to the association of the
directors with the
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No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
securities market business and
outstanding action initiated against them
was not limited to any time period.
securities market business and
outstanding action initiated against them
by SEBI has now been restricted to five
years.
securities market business
and outstanding action
initiated against them by
SEBI has now been
restricted to five years.
134. Clause (XI) (E)
The confirmation pertaining to wilful
defaulters by the issuer, promoters, group
companies, the relatives of promoters and
group companies was required to be
provided.
The confirmation with respect to the
wilful defaulter is not required under this
chapter.
1. The confirmation with
respect to the wilful
defaulter is not required to
be given under ICDR 2018
in this chapter. However,
the same still remains to be
an eligibility requirement
under regulation 5 of the
ICDR 2018.
135. Clause (XI) (L)
The address of Registrar of Companies
and SEBI were required to be disclosed
The disclosure pertaining to the address
of the Registrar of Companies and of
SEBI is not required to be provided.
1. The disclosure pertaining
to the address of the
Registrar of Companies
and SEBI where the offer
document is registered has
been excluded under the
ICDR 2018.
136. Clause (XI) (K)
Previously, the disclaimer clause of only
Reserve Bank of India and Insurance and
Regulatory Development Authority of
India was required to be disclosed.
Clause (14) (J)
The ICDR 2018 requires the disclaimer
clause of Reserve Bank of India and
Insurance and Regulatory Development
Authority of India and other relevant
regulatory authority to be disclosed.
-
137. Clause (XI) (H)
The disclosure in relation the caution was
required to be disclosed.
The disclosure requirement of caution
has been removed.
-
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
138. Clause (XI) (Q)
For previous public or rights issue (during
last five years), the said disclosure had to
be included.
Clause (14) (N)
The disclosure pertaining to the amount
paid or payable by premium, date and
proposed dates of issue and shares have
been or are to be issued at a premium
and other shares of the same class at a
lower premium, or at par or at a
discount, the reasons for the
differentiation and how any premiums
received have been or are to be disposed
of for the previous public or rights issue
is not required to be disclosed.
1. In the ICDR 2018, the
disclosure pertaining to the
amount paid or payable by
premium, date and
proposed dates of issue and
shares have been or are to
be issued at a premium and
other shares of the same
class at a lower premium,
or at par or at a discount,
the reasons for the
differentiation and how
any premiums received
have been or are to be
disposed of for the
previous public or rights
issue is not required to be
disclosed.
139. Clause (XI) (Q)
Similar disclosure was required under
ICDR 2009, however, no period was
prescribed.
Clause 14 (O)
The disclosure in relation to the
commission or brokerage on previous
issues has been restricted to five years
under ICDR 2018.
1. The ICDR 2018 restricts
the disclosure for
commission and brokerage
on previous issued to five
years.
140. There was no such format prescribed for
disclosing the past price issues handled by
lead managers.
Clause 14 (R)
The format for the past price issues
handled by the lead managers has been
provided.
1. The ICDR 2018 provides a
format for the past price
issues handled by the lead
managers.
141. Clause (XI) (U)
The list of public / rights issues made by
Clause (14) (Q)
The time period for the list of public /
1. The time period for listing
of public / rights issues is
limited to five years and
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
the company during ten years was
required to be disclosed. Additionally,
disclosure pertaining to the objects
mentioned in last three issues were met
was required to be given.
rights issues is limited to five years and
the disclosure with respect to the objects
mentioned in the offer document of last
three issues is not required to be
disclosed.
the disclosure with respect
to the objects mentioned in
the offer document of last
three issues is not required
to be disclosed under the
ICDR 2018. Under ICDR
2018, promise v.
performance disclosures is
not required for listed
group companies and listed
associates.
142. Clause (XI) (V)
The disclosure with respect to the
outstanding debentures or bonds and
redeemable preference shares and other
instruments issued by the company
outstanding as on the date of offer
document and terms of issue was required
to be included.
The disclosure pertaining to the
outstanding debentures or bonds and
redeemable preference shares and other
instruments issued by the issuer
outstanding as on the date of offer
document and terms of issue is not
required to be included.
1. The disclosure pertaining
to the outstanding
debentures or bonds and
redeemable preference
shares and other
instruments issued by the
issuer outstanding as on
the date of offer document
and terms of issue is not
required to be included in
the ICDR 2018.
143. Offering Information Clause (XII) (B) (2)
ICDR 2009 had the option to subscribe to
the securities in physical and demat form.
However, this requirement was
inapplicable in accordance with the
Companies Act.
Clause (15) (B) (2)
The ICDR 2018 clarifies that the
disclosure pertaining to the option to
subscribe in the issue only in
dematerialized form in terms of
Companies Act is required to be
included.
-
144. Clause (XII) (B) (4)
The escrow mechanism under ICDR 2009
was through the escrow account of the
Clause (15) (B) (3)
Under ICDR 2018, the escrow
mechanism is restricted to only the
-
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Sr.
No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
company and the syndicate member.
However, all applications except anchor
investors are required to make through
ASBA mechanism.
escrow account of the company, for
subscription by anchor investors.
145. Clause (XII) (B) (15)
The payment instructions for payment
into escrow account of the syndicate
members under the ICDR 2009 is no
longer applicable.
Clause (15) (B) (14)
The payment mechanism under ICDR
2018, is now restricted through the
escrow account of the company and
through ASBA.
-
146. Clause XII (B) (18)
The ICDR 2009 required a disclosure
pertaining to the application form
containing space for indicating number of
specified securities in demat and physical
form.
-
1. This instruction
requirement has been
deleted under the ICDR
2018.
147. Clause XII (B) (19)
The ICDR 2009 contained instructions
with respect to separate applications for
demat and physical shares and the
applications for physical shares were
treated as multiple shares.
- 1. This instruction
requirement has been
deleted under the ICDR
2018.
148. Clause XII (B) (20)
The instructions with respect to partial
allotment in demat option and balance, if
any, in physical form has been deleted.
- -
149. Clause XII (B) (32)
Clause (15) (B) (28)
1. The disclosure was
restricted only to non –
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No.
Chapter Provision as per SEBI (Issue of Capital
and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”)
Provision as per SEBI (Issue of
Capital and Disclosure Requirements)
Regulations, 2018 (“ICDR 2018”)
Remarks
The disclosure in relation to the foreign
ownership was required only for non –
resident Indians and foreign portfolio
investors under ICDR 2009.
The restrictions on foreign ownership of
Indian securities now require disclosure
with respect to other non-residents, in
addition to non – resident Indians and
foreign portfolio investors.
resident Indians and
foreign portfolio investors
under the ICDR 2009.
AZB & Partners Privileged and confidential
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ANNEX B
Comparison of the index/ format of ICDR 2018 with the provisions of the ICDR 2009
Serial Number Particulars Page Number Places where these particulars appear in the SEBI
(ICDR) 2009
I Regulations
1 Chapter I - Preliminary 1 Chapter I - Preliminary
2 Chapter II - Initial Public Offer on Main Board 8
2.1 Part I: Eligibility Requirements 8 Chapter III – Provisions as to Public Issue
Part I – Eligibility Requirements
2.2 Part II: Issue of Convertible Debt Instruments and Warrants 11 Chapter II – Common conditions for Public Issues and
Rights Issues
2.3 Part III: Promoters’ Contribution 12 Chapter III – Provisions as to Public Issue
Part III – Promoters’ Contribution
2.4 Part IV: Lock-in and Restrictions on Transferability 14
Chapter III – Provisions as to Public Issue
Part IV – Restriction on Transferability (Lock-in) of
Promoters’ Contribution, etc.
2.5 Part V: Appointment of Lead Managers, other
Intermediaries and Compliance Officer 16
Chapter II – Common conditions for Public Issues and
Rights Issues
2.6 Part VI: Disclosures in and Filing of Offer Documents 17 Chapter V – Manner of Disclosures in the Offer Documents
2.7 Part VII - Pricing 19 Chapter III – Provisions as to Public Issue
Part II – Pricing in Public Issue
2.8 Part VIII: Issuance Conditions and Procedure 20 Chapter III – Provisions as to Public Issue
Part V – Minimum Offer to Public, Reservations, etc.
2.9 Part IX: Miscellaneous 26
Chapter II – Common conditions for Public Issues and
Rights Issues
&
Chapter III – Provisions as to Public Issue
Part V – Minimum Offer to Public, Reservations, etc.
3 Chapter III - Rights Issue 28
3.1 Part I: Eligibility Requirements 28 Chapter II – Common conditions for Public Issues and
Rights Issues
3.2 Part II: Issue of Convertible Debt Instruments and Warrants 29 Chapter II – Common conditions for Public Issues and
Rights Issues
AZB & Partners Privileged and confidential
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Serial Number Particulars Page Number Places where these particulars appear in the SEBI
(ICDR) 2009
3.3 Part III: Record Date 31 Chapter IV – Rights Issue
3.4 Part IV – Appointment of Lead Managers, other
Intermediaries and Compliance Officer 31
Chapter II – Common conditions for Public Issues and
Rights Issues
3.5 Part V: Disclosures in and Filing of Letters of Offer 32 Chapter V – Manner of Disclosures in the Offer Documents
3.6 Part VI: Pricing 33 Chapter IV – Rights Issue
3.7 Part VII: Issuance Conditions and Procedure 34
Chapter II – Common conditions for Public Issues and
Rights Issues
&
Chapter IV – Rights Issue
3.8 Part VIII: Miscellaneous 39 Chapter II – Common conditions for Public Issues and
Rights Issues
3.9 Part IX: Fast Track Rights Issue 39 Chapter II – Common conditions for Public Issues and
Rights Issues
4 CHAPTER IV - FURTHER PUBLIC OFFER 41
4.1 Part I: Eligibility Requirements 41
Chapter II – Common conditions for Public Issues and
Rights Issues &
Chapter III – Provisions as to Public Issue
Part I – Eligibility Requirements
4.2 Part II: Issue of Convertible Debt Instruments and Warrants 42 Chapter II – Common conditions for Public Issues and
Rights Issues
4.3 Part III: Promoters’ Contribution 44 Chapter III – Provisions as to Public Issue
Part III – Promoters’ Contribution
4.4 Part IV: Lock-in and Restrictions on Transferability 46
Chapter III – Provisions as to Public Issue
Part IV – Restriction on Transferability (Lock-in) of
Promoters’ Contribution, etc.
4.5 Part V: Appointment of Lead Managers, other
Intermediaries and Compliance Officer 47
Chapter II – Common conditions for Public Issues and
Rights Issues
4.6 Part VI: Disclosures in and Filing of Offer Documents 48 Chapter V – Manner of Disclosures in the Offer Documents
4.7 Part VII - Pricing 50 Chapter III – Provisions as to Public Issue
Part II – Pricing in Public Issue
4.8 Part VIII: Issuance Conditions and Procedure 51 Chapter III – Provisions as to Public Issue
Part V – Minimum Offer to Public, Reservations, etc.
4.9 Part IX: Miscellaneous 57 Chapter II – Common conditions for Public Issues and
Rights Issues
4.10 Part X: Fast Track Further Public Offer 59 Chapter II – Common conditions for Public Issues and
Rights Issues
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Serial Number Particulars Page Number Places where these particulars appear in the SEBI
(ICDR) 2009
5 Chapter V – Preferential Issue 61
5.1 Part I: Issuers ineligible to make a Preferential Issue 62 Chapter VII – Preferential Issue
5.2 Part II: Conditions for Preferential Issue 63 Chapter VII – Preferential Issue
5.3 Part III: Disclosures to Shareholders 64 Chapter VII – Preferential Issue
5.4 Part IV: Pricing 64 Chapter VII – Preferential Issue
5.5 Part V: Lock-in and Restrictions on Transferability 66 Chapter VII – Preferential Issue
5.6 Part VI: Consideration and Allotment 67 Chapter VII – Preferential Issue
6 Chapter VI – Qualified Institutions Placement 69
6.1 Part I: Conditions for Qualified Institutions Placement 69 Chapter VIII – Qualified Institutions Placement
6.2 Part II: Appointment of Lead Managers 70 Chapter VIII – Qualified Institutions Placement
6.3 Part III: Placement Document 70 Chapter VIII – Qualified Institutions Placement
6.4 Part IV: Pricing 71 Chapter VIII – Qualified Institutions Placement
6.5 Part V: Tenure of Convertible Securities 71 Chapter VIII – Qualified Institutions Placement
6.6 Part VI: Transferability 71 Chapter VIII – Qualified Institutions Placement
6.7 Part VII: Application and Allotment 72 Chapter VIII – Qualified Institutions Placement
7 Chapter VII - Initial Public Offer of Indian Depository
Receipts 72
7.1 Part I: Eligibility Requirements 72 Chapter X – Issue of Indian Depository Receipts
7.2 Part II: Appointment of Lead Managers, other
Intermediaries and Compliance Officer 73 Chapter X – Issue of Indian Depository Receipts
7.3 Part IV: Disclosures in and Filing of Offer Documents 74 Chapter X – Issue of Indian Depository Receipts
7.4 Part V - Pricing 75 Chapter III – Provisions as to Public Issue
Part II – Pricing in Public Issue
7.5 Part VI: Issuance Conditions and Procedure 76
Chapter II – Common conditions for Public Issues and
Rights Issues
&
Chapter X – Issue of Indian Depository Receipts
8 Chapter VIII - Rights Issue of Indian Depository
Receipts 81 Chapter XA of Indian Depository Receipts
9 Chapter IX - Initial Public Offer by Small and Medium
Enterprises 84
9.1 Part I: Eligibility Requirements 84 Chapter III – Provisions as to Public Issue
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Part I – Eligibility Requirements
&
Chapter XB – Issue of Specified Securities by Small and
Medium Enterprises
9.2 Part II: Issue of Convertible Debt Instruments and Warrants 86 Chapter II – Common conditions for Public Issues and
Rights Issues
9.3 Part III: Promoters’ Contribution 87 Chapter III – Provisions as to Public Issue
Part III – Promoters’ Contribution
9.4 Part IV: Lock-in and Restrictions on Transferability 89
Chapter III – Provisions as to Public Issue
Part IV – Restriction on Transferability (Lock-in) of
Promoters’ Contribution, etc.
9.5 Part V: Appointment of Lead Managers, other
Intermediaries and Compliance Officer 91
Chapter II – Common conditions for Public Issues and
Rights Issues
9.6 Part VI: Disclosures in and Filing of Offer Documents 91
Chapter V – Manner of Disclosures in the Offer Documents
&
Chapter XB – Issue of Specified Securities by Small and
Medium Enterprises
9.7 Part VII - Pricing 92 Chapter III – Provisions as to Public Issue
Part II – Pricing in Public Issue
9.8 Part VIII: Issuance Conditions and Procedure 93
Chapter III – Provisions as to Public Issue
Part V – Minimum Offer to Public, Reservations, etc.
&
Chapter XB – Issue of Specified Securities by Small and
Medium Enterprises
9.9 Part IX: Miscellaneous 100
Chapter II – Common conditions for Public Issues and
Rights Issues
&
Chapter III – Provisions as to Public Issue
Part V – Minimum Offer to Public, Reservations, etc.
10 Chapter X - Institutional Trading Platform 102
10.1 Part I: Applicability 102 Chapter XC – Listing on Institutional Trading Platform
10.2 Part II: Listing without a Public Issue 102 Chapter XC – Listing on Institutional Trading Platform
10.3 Part III: Listing pursuant to an Initial Public Offer 103 Chapter XC – Listing on Institutional Trading Platform
10.4 Part IV: General Conditions 104 Chapter XC – Listing on Institutional Trading Platform
11 Chapter XI - Bonus Issue 105 Chapter IX – Bonus Issue
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12 Chapter XII - Miscellaneous 106 Chapter XII - Miscellaneous
II Schedules
1 Schedule I – Lead Managers’ Inter-se Allocation of
Responsibilities 107 Schedule I - Inter-se Allocation of Responsibilities
2 Schedule II - Contents of Agreement between Lead
Manager(s) and Issuer 108
Schedule II - Format of Agreement between Lead
Merchant Bankers to the Issue and Issuer/Issuing
Company
3 Schedule III - Fees to be paid along with Draft Offer
Document/ Draft Letter of Offer or Offer Document 110 Schedule IV - Fees to be paid along with Offer Document
4 Schedule IV – Filing of Offer Documents with the Board 111 Not Present
5 Schedule V - Formats of Due Diligence Certificates 112 Schedule VI- Formats Of Due Diligence Certificates
5.1
Form A - Format of due diligence certificate to be given by
the lead manager(s) along with draft offer document or draft
letter of offer
112 Form A - Format of Due Diligence Certificate to be given by
Merchant Banker along with Draft Offer Document
5.2 Form B - Format of due diligence certificate to be given by
the debenture trustee along with draft offer document 114
Form B - Format of Due Diligence Certificate to be given by
Debenture Trustee along with Draft Offer Document
5.3
Form C - Format of due diligence certificate to be given by
the lead manager(s) at the time of registering offer
document/filing letter of offer
115
Form C - Format of Due Diligence Certificate to be given
by Merchant Banker at the time of registering Offer
Document with the Registrar of Companies/filing Letter of
Offer with the Designated Stock Exchange
5.4
Form D - Format of due diligence certificate to be given by
the lead manager(s) in the event of disclosure of material
events after the filing of the offer document
116 Not Present
5.5.
Form E - Additional confirmations/ certification to be given
by the lead manager(s) in the due diligence certificate to be
given along with the offer document/ letter of offer for a fast
track issue
116
Form F - Additional Confirmations/ Certification to be given
by Merchant Banker in Due Diligence Certificate to be
given along with Offer Document for Fast Track Issue
5.6 Form F - Format of due diligence certificate to be given by
the lead manager(s) along with the final post-issue report 117
Form G - Format of Due Diligence Certificate to be given by
Merchant Banker along with Final Post Issue Report
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5.7
Form G - Additional confirmations/ certification to be given
by the lead manager(s) in due diligence certificate to be
given along with offer document regarding issues on the
SME exchanges
117
Form H - Additional Confirmations/Certification to be given
by Merchant Banker in Due Diligence Certificate to be
given along with Offer Document regarding SME Exchange
5.8 Form H - Format of the due diligence certificate to be filed
by the lead manager for IDR issues 118
Schedule XIX - Disclosures in Prospectus and Abridged
Prospectus for Issue of Indian Depository Receipts - Part
C - Format of the due diligence certificate to be filed by the
lead manager for IDR issues
6 Schedule VI - Disclosures in the Offer Document,
Abridged Prospectus and Abridged Letter of Offer 120
Schedule VIII - Disclosures in Offer Document,
Abridged Prospectus and Abridged Letter of Offer
6.1 Part A – Disclosures in offer document/letter of offer 120 Part A - Disclosures in Red Herring Prospectus, Shelf
Prospectus and Prospectus
6.1.1 Cover pages 120
Part A – Cover pages 6.1.1.1 Front cover pages 120
6.1.1.2 Back cover pages 122
6.1.2 Table of Contents 122 Part A – Table of Contents
6.1.3 Definitions and abbreviations 122 Part A –Definitions and Abbreviations
6.1.4 Offer Document Summary 122 Part A – Prominent Notes
6.1.5 Risk Factors 123 Part A –Risk Factors
6.1.6 Introduction 125 Part A –Introduction
6.1.7 General information 125 Part A – Introduction - General Information
6.1.8 Capital Structure 127 Part A – Introduction -Capital Structure
6.1.9 Particulars of the issue 131 Part A –Particulars of the Issue
6.1.10 About the Issuer 136 Part A – About the Issuer
6.1.10.1 Industry Overview 136
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6.1.10.2 Business Overview 136
6.1.10.3 Key Industry-Regulations (is applicable) 137
6.1.10.4 History and Corporate Structure of the issuer 137
6.1.10.5 Shareholders’ agreements and other agreements 137
6.1.10.6 Management 138
6.1.10.7 Promoters/principal shareholders 140
6.1.10.8 Dividend policy 142
6.1.11 Financial Statements 142 Part A – Financial Statements
6.1.11.1
Requirements in case Indian Accounting Standards (Ind AS)
is applicable in the latest period presented in Restated
Financial Information
142 Not Present
6.1.11.2 Requirements in case Indian GAAP is applicable in the
latest period presented in Restated Financial Information 147 Not Present
6.1.11.3 Financial Information of the Issuer in further public offers 152
Financial Statements – Financial Information of the Issuer -
Alternative Financial Information of the issuer in further
public offers
6.1.12 Legal and Other Information 154
Part A – Legal and Other Information 6.1.12.1 Outstanding Litigations and Material Developments 154
6.1.12.2 Government approvals 155
6.1.13 Information with respect to group companies 155 Dispersed
6.1.14 Other Regulatory and Statutory Disclosures 156 Part A –Other Regulatory and Statutory Disclosures
6.1.15 Offering Information 160
Part A –Offering Information 6.1.15.1 Terms of the Issue 160
6.1.15.2 Issue Procedure 161
6.1.16 Any other material disclosures, as deemed necessary 166 Part A – Any other material disclosures, as deemed
necessary
6.1.17 In case of a fast track issue, the disclosures specified in this
Part, which have been indicated in Part B, need not be made 166
Part A – In case of a fast track issue, the disclosures
specified in this Part, which have been indicated in Part B,
need not be made
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6.1.18 Other Information 166 Part A –Other Information
6.2 Part B - Disclosures in a letter of offer 166 Part E –Disclosures in letter of Offer
6.2.1 Cover Pages 167
Part E – Cover Pages
6.2.2 Back cover pages 168
6.2.3 Table of contents 168 Part E –Table of Contents
6.2.4 Definitions and abbreviations 168 Part E –Definitions and Abbreviations
6.2.5 Letter of offer summary 169 Part E – Prominent Notes
6.2.6 Risk factors 169 Part E –Risk Factors
6.2.7 Introduction 170
Part E –Introduction 6.2.7.1 Summary 170
6.2.7.2 General Information 170
6.2.7.3 Capital Structure 171
6.2.8 Particulars of the Issue 171 Part E –Particulars of the Issue
6.2.9 History and Corporate Structure of the issuer 175 Part E –History and Corporate Structure about the Issuer
6.2.10 Management (Board of Directors) 175 Part E –Management (Board of Directors)
6.2.11 Financial Information of the issuer 176 Part E –Financial Information of the Issuer
6.2.12 A statement to the effect that the price has been arrived at in
consultation between the issuer and the lead manager(s) 177
Part E – A statement to the effect that the price has been
arrived at in consultation between the issuer and the
Merchant banker
6.2.13 Disclosures pertaining to wilful defaulters 177 Not Present
6.2.14 Outstanding Litigations and Defaults 178 Part E –Outstanding Litigations and Defaults
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6.2.15 Government Approvals or Licensing Arrangements 178 Part E – Government Approvals or Licensing Arrangements
6.2.16 Material Developments 178 Part E –Material Developments
6.2.17 Other Regulatory and Statutory Disclosures 178 Part E – Other Regulatory and Statutory Disclosures
6.2.18 Offering Information 180 Part E – Offering Information
6.2.19 Undertakings by the issuer in connection with the issue 181 Part E – Undertakings by the issuer in connection with the
issue
6.2.20 Utilization of Issue Proceeds 182 Part E – Utilization of Issue Proceeds
6.2.21 Restrictions on foreign ownership of Indian securities, if any 182 Part E –Restrictions on foreign ownership of Indian
securities, if any
6.2.22 Statement regarding minimum subscription clause 183 Part E –Statement regarding minimum subscription clause
6.2.23 Statutory and other information 183 Part E –Statutory and other information
6.2.24 Any other material disclosures, as deemed necessary 183 Part E –Any other material disclosures, as deemed necessary
6.2.25 Declaration 183 Part E –Declaration
6.3 Part C - Certain disclosures not mandatory in case of a
further public offer 183
Part C - Certain disclosures not mandatory in case of a
further public offer
6.4 Part D - Certain disclosures not mandatory in case of a fast
track public issue 184
Part E - Certain disclosures not mandatory in case of a fast
track public issue
6.5 Part E - Disclosures in an abridged prospectus 184 Part D - Disclosures in an abridged prospectus
6.6 Part F - Disclosures in an abridged letter of offer 193 Part F - Disclosures in an abridged letter of offer
7 Schedule VII - Disclosures in a Placement Document 193 Schedule XVIII - Disclosures in Placement Document
8 Schedule VIII - Disclosures in Offer Document and 195 Schedule XIX - Disclosures in Prospectus and Abridged
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Serial Number Particulars Page Number Places where these particulars appear in the SEBI
(ICDR) 2009
Abridged Prospectus and Letter of Offer for Issue of
Indian Depository Receipts
Prospectus for Issue of Indian Depository Receipts
8.1 Part A - Disclosures in offer document for issue of Indian
depository receipts 195
Part A - Disclosures in Prospectus for Issue of Indian
Depository Receipts
8.1.1 General instructions with respect to contents of the offer
document 195
Part A - General instructions with respect to contents of the
Prospectus
8.1.2 The issue 196 Part A -The issue
8.1.3 Forward-looking statements 196 Part A -Forward-looking statements
8.1.4 General Information 196 Part A - General Information
8.1.5 Risk Factors 197 Part A - Risk Factors and Management Perception, if any
8.1.6 Recent Developments 198 Part A - Recent Developments
8.1.7
Exchange-wise market price information and other
information concerning the shares in the domestic market of
the issuing company
198
Part A -Market price information and other information
concerning the shares in the domestic market of the issuing
company
8.1.8 Dividends 198 Part A - Dividends
8.1.9 Exchange rates 198 Part A - Exchange rates
8.1.10 Foreign investment and exchange controls of the country of
incorporation/where the shares are listed 198
Part A - Foreign investment and exchange controls of the
country of incorporation/where the shares are listed
8.1.11 Objects of the issue/use of proceeds 198 Part A - Objects of the issue/use of proceeds
8.1.12 Interim use of funds 199 Part A - Interim use of funds
8.1.13 Capitalization statement 199 Part A - Capitalization statement
8.1.14 Capital Structure 199 Part A - Capital Structure
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8.1.15 Financial information 199 Part A - Financial information
8.1.16
Statement on material developments subsequent to the date
of the last financial statements as disclosed in the offer
document
201
Part A -Statement on material developments subsequent to
the date of the last financial statements as disclosed in the
Prospectus
8.1.17
Management discussion and analysis of the financial
statements (by comparing the recent financial year with the
previous three financial years)
201
Part A - Management discussion and analysis of the
financial statements (by comparing the recent financial year
with the previous three financial years)
8.1.18 Industry and business overview 202 Part A - Industry and business overview
8.1.19 Details of the issuing company 202 Part A - Details of the issuing company
8.1.20 Subsidiaries and associates of the issuing company 202 Part A - Subsidiaries and associates of the issuing company
8.1.21 Management 202 Part A - Management
8.1.22 Securities market of the country of incorporation where the
shares are listed 203
Part A - Securities market of the country of incorporation
where the shares are listed
8.1.23 Description of the IDR and rights of IDR holders 203 Part A - Description of the IDR and rights of IDR holders
8.1.24 Provisions regarding transfer of shares and depository
receipts 203
Part A - Provisions regarding transfer of shares and
depository receipts
8.1.25 Information relating to the depository - Indian and
international 203
Part A - Information relating to the depository - Indian and
international
8.1.26 Approvals of the government/regulatory authorities 203 Part A - Approvals of the government/regulatory authorities
8.1.27 Taxation framework in India and the country of
incorporation/ where shares are listed 204
Part A - Taxation framework in India and the country of
incorporation/ where shares are listed
8.1.28 Outstanding litigations and defaults 204 Part A - Outstanding litigations and defaults
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8.1.29 Basis of issue price 204 Part A - Basis of issue price
8.1.30 Main provisions of articles of association/main charter of
the issuing company 204
Part A - Main provisions of articles of association/main
charter of the issuing company
8.1.31 Material contracts and documents for inspection 204 Part A - Material contracts and documents for inspection
8.1.32 Other information 205 Part A - Other information
8.2 Part B - Disclosures in an abridged prospectus for Indian
depository receipts 205
Part B - Disclosures in an abridged prospectus for issue of
Indian depository receipts
8.2.1 General Information 205 Part B - General Information
8.2.2 Capital Structure of the Issuing Company 206 Part B - Capital Structure of the Issuing Company
8.2.3 Terms of the Present Issue 206 Part B - Terms of the Present Issue
8.2.4 Instructions for Applicants 206 Part B - Instructions for Applicants
8.2.5 Particulars of the Issue 207 Part B -
8.2.6 Description of the IDRs and Rights of IDR Holders 207 Part B -
8.2.7 Business Model/ Business Overview and Strategy 207 Not Present
8.2.8 Exchange-wise stock market data 207 Part B – Company, Management and Project
8.2.9 Internal Risk Factors 207 Not Present
8.2.10 Outstanding Material Litigations and Defaults 207 Part B - Outstanding Material Litigations and Defaults
8.2.11 Material Developments 208 Part B - Material Development
8.2.12 Board of Directors 208 Part B – Company, Management and Project
8.2.13 Financial Performance of the Issuing company for the last 208 Part B – Financial Performance of the Issuing company for
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three years the last three years
8.2.14 Disclosure on Investor Grievances and Redressal System 208 Part B – Disclosure on Investor Grievances and Redressal
System
8.2.15 Information relating to relevant provisions of taxation law,
tax treaties and their impact for IDR holders 208
Part B – Information relating to relevant provisions of
Taxation law, Tax Treaties and their impact for IDR holders
8.2.16 Brief details of the domestic depository, overseas custodian
bank and depository agreement 208
Part B – Brief details of the Domestic Depository, Overseas
Custodian Bank and Depository Agreement
8.2.17 Signatories to the Prospectus 208 Part B – Signatories to the Prospectus
8.3 Part C - Disclosures in the addendum to an offer document
for rights issue of Indian depository receipts 208
Schedule XXI – Part A - Disclosures in the addendum to an
offer document for rights issue of Indian depository receipts
8.3.1 Cover page 208 Part A - Cover page
8.3.2 Instructions for applicants 209 Part A - Instructions for applicants
8.3.3 General information 210 Part A - General information
8.3.4 Management (Board of Directors) 211 Part A - Management (Board of Directors)
8.3.5 Financial information of the issuer 211 Part A - Financial information of the issuer
8.3.6 Risk factors 211 Part A - Risk factors and Management Perception, if any
8.3.7 Capital structure 212 Part A - Capital Structure
8.3.8 Particulars of the issue 212 Part A - Particulars of the Issue
8.3.9 Market price information and other information concerning
the shares/ IDRs 212
Part A - Market price information and other information
concerning the shares/ IDRs
8.3.10 Exchange rates 213 Part A - Exchange Rates
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Serial Number Particulars Page Number Places where these particulars appear in the SEBI
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8.3.11 Material litigations and defaults 213 Part A - Material Litigations and Defaults
8.3.12 Material development 213 Part A - Material Development
8.3.13 Material contracts and documents for inspection 213 Part A - Material Contracts and Documents for Inspection
8.3.14 Other regulatory and statutory disclosures 213 Part A - Other Regulatory and Statutory Disclosures
8.3.15 Undertakings by the issuer in connection with the issue 215 Part A - Undertakings by the issuer in connection with the
issue
8.3.16 Utilisation of issue proceeds 215 Part A - Utilisation of Issue Proceeds
8.3.17 Restrictions on foreign ownership of Indian securities, if any 215 Part A - Restrictions on foreign ownership of Indian
securities, if any
8.3.18 Any other material disclosures 215 Part A - Any other material disclosures
8.3.19 Declaration 215 Part A - Declaration
8.4 Part D - Disclosures in an abridged letter of offer for rights
issue of Indian depository receipts 216
Part B - Disclosures in an abridged letter of offer for rights
issue of Indian depository receipts
8.4.1 Instructions for applicants 216 Part B - Instructions for applicants
8.4.2 General information 216 Part B - General Information
8.4.3 Capital structure of the issuing company 217 Part B - Capital Structure of the issuing company
8.4.4 Terms of the present Issue 217 Part B - Terms of the Present Issue
8.4.5 Particulars of the issue 217 Part B - Particulars of the Issue
8.4.6 Company, management and project 217 Part B - Company, Management and Project
8.4.7 Outstanding material litigations and defaults 218 Part B - Outstanding Material Litigations and Defaults (in a
summarized tabular form)
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8.4.8 Material development 218 Part B - Material Development
8.4.9 Time and Place of Inspection of material contracts 218 Part B - Time and Place of Inspection of material contracts
8.4.10
Financial Performance of the Issuing company as per last
completed accounting year for which audit has been
completed and for the latest stub period for which
audit/limited review has been completed
218
Part B - Financial Performance of the Issuing company as
per last completed accounting year for which audit has been
completed and for the latest stub period for which
audit/limited review has been completed
8.4.11 Disclosure on Investor Grievances and Redressal System 218 Part B - Disclosure on Investor Grievances and Redressal
System
8.4.12 Brief details of the Domestic Depository, Overseas
Custodian Bank and Depository Agreement 218
Part B - Brief details of the Domestic Depository, Overseas
Custodian Bank and Depository Agreement
8.4.13 Signatories to the Letter of offer 218 Part B - Signatories to the Letter of offer
9 Schedule IX – Public Communications and Publicity
Materials 218 Not Present
10 Schedule X - Formats of Advertisements for a Public
Issue 221
Schedule XIII - Formats of Advertisements for a Public
Issue
10.1 Part A - Format of pre-issue advertisement for a public issue 221 Part A - Format of pre-issue advertisement for a public issue
(Fixed price/ Book built)
10.2 Part B - Format of issue opening advertisement for a public
issue 223
Part B - Format of issue opening advertisement for a public
issue (Fixed price/ Book built)
10.3 Part C - Format of issue closing advertisement for a public
issue 225
Part C - Format of issue closing advertisement for a public
issue (Fixed price/ Book built)
10.4 Part D - Format of billboards and banners 226 Not Present
10.5 Part E - Compliance certificate in respect of news reports 227 Part D - Compliance certificate in respect of news reports
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Serial Number Particulars Page Number Places where these particulars appear in the SEBI
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11 Schedule XI - Format of Report to be submitted by the
Monitoring Agency 228
Schedule IX - Format of Report to be submitted by
Monitoring Agency
12 Schedule XII – Mandatory Collection Centres 231 Schedule III – Mandatory Collection Centres
13 Schedule XIII - Book Building Process 231 Schedule XI - Book Building Process
13.1 Part A – Book building process 231 Part A
13.1.1 Lead Manager(s) 231 Part A – Lead Book Runner
13.1.2 Syndicate Member(s) 231 Part A – Syndicate Members
13.1.3 Underwriting 231 Part A – Underwriting
13.1.4 Agreement with the stock exchanges 231 Part A – Agreement with the stock exchange
13.1.5 Appointment of stock brokers as bidding/collection centres 232 Part A – Appointment of stock brokers as bidding/collection
centres
13.1.6 Price not to be disclosed in the draft red herring prospectus 232 Part A – Price not to be disclosed in the draft red herring
prospectus
13.1.7 Floor price and price band 232 Part A – Floor Price and Price Band
13.1.8
The manner and contents of the bid-cum-application form
and revision form (accompanied with abridged prospectus)
shall be as specified by the Board
233
The manner and contents of Application-cum-Bidding Form
and Revision Application-cum-Bidding Form (accompanied
with abridged prospectus) shall be as specified by the Board
through Circular.]
13.1.9 Extension of issue period 233 Part A – Floor Price and Price Band
13.1.10 Anchor Investors 233 Part A – Anchor investors
13.1.11 Margin money 235 Part A – Margin Money
13.1.12 Bidding process 235 Part A – Bidding process
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Serial Number Particulars Page Number Places where these particulars appear in the SEBI
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13.1.13 Determination of price 236 Part A – Determination of price
13.1.14 Registering of prospectus with the Registrar of Companies 236 Part A – Registering of prospectus with the Registrar of
Companies
13.1.15 Manner of allotment/ allocation 236 Part A – Manner of Allotment/ Allocation
13.1.16 Maintenance of records 236 Part A – Maintenance of Books and Records
13.1.17 Applicability to Fast Track Issues 236 Part A – Applicability to fast track issues
13.2 Part B - Format of bid data displayed on stock exchange 236 Part B - Format of bid data displayed on stock exchange
13.2.1 Details of Allocation to the Anchor Investors 236 Part B – Details of Allocation to the Anchor Investors
13.2.2 Details of Allocation to Investors other than Anchor
Investors 237
Details of Allocation to Investors Part B – other than Anchor
Investors
13.3 Part C - Illustration regarding allotment to qualified
institutional buyers other than anchor investors 237
Part C - Illustration regarding allotment to qualified
institutional buyers other than anchor investors
13.3.1 Issue Details 237 Part C - Issue Details
13.3.2 Details of QIB Bids 238 Part C - Details of QIB Bids
13.3.3 Details of Allotment to QIB Bidders/Applicants 238 Part C - Details of Allotment to QIB Bidders/Applicants
13.4 Part D - Alternate method of book building 239 Part D - Alternate method of book building
14 Schedule XIV - Illustration explaining the procedure of
Allotment 240
Schedule XV - Illustration explaining procedure of
Allotment
14.1 Part A - Illustration explaining the procedure of allotment 240 Schedule XV – A. - Illustration explaining procedure of
allotment
14.2 Part B - Illustration explaining minimum application size 242 Schedule XIV - Illustration explaining minimum
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application size
15 Schedule XV - Format of Report for Green Shoe Option 242 Schedule XII - Format of Report for Green Shoe Option
16 Schedule XVI - Nature of changes in the Offer
Document requiring filing of updated Offer Document 243
Schedule XVI - Nature of updation/changes in the Offer
Document and consequent steps therein requiring filing
of updated Offer Document
16.1 Changes which require fresh filing of the draft offer
document with the Board, along with fees 243
Changes which require fresh filing of the draft offer
document with the Board, along with fees
16.2 Changes which require filing of the updated offer document
with the Board, along with fees 243
Changes which require filing of the updated offer document
with the Board, along with fees
16.3 Changes which require filing of the updated offer document
with the Board, without fees 244
Changes which require filing of the updated offer document
with the Board, without fees
17 Schedule XVII - Formats of Post-Issue Reports 244 Schedule XVI - Formats of Post-Issue Reports
17.1 Part A - Format of final post-issue report for a public issue 244 Part C - Format of final post-issue report for a public issue
17.1.1 In case of a subscribed Issue 244 Part C - In case of subscribed Issue
17.1.2 In case of under subscribed Issue 245 Part C - In case of under subscribed Issue
17.2 Part B - Format of initial post-issue report for a rights issue 246 Part B - Format of initial post-issue report for a rights issue
17.3 Part C - Format of final post-issue report for a rights issue 247 Part D - Format of final post-issue report for a rights issue
17.3.1 In case of a subscribed Issue 247 Part D - In case of subscribed Issue
17.3.2 In case of under-subscribed Issue 248 Part D - In case of under subscribed Issue
18 Schedule XVIII - Format of Underwriting Devolvement
Statement 249
Schedule XVIII - Format of Underwriting Devolvement
Statement
19 Schedule XIX - Listing of Securities on Stock Exchanges 249 Chapter XI - Listing of Securities on Stock Exchanges
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November 2018 AZB Capital Markets Update
117
Serial Number Particulars Page Number Places where these particulars appear in the SEBI
(ICDR) 2009
20 Schedule XX - Conditions/ manner of providing exit
opportunity to Dissenting Shareholders 250
Chapter VI-A – Conditions and manner of providing exit
opportunity to Dissenting Shareholders
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118
Law Firm of the Year – Capital Markets
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Corporate INTL, 2018
Law Firm of the Year – Capital Markets
Asia-Mena Counsel, 2017
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Recommended for Capital Markets
RSG India Report, 2017
Law Firm of the Year – India – Capital Markets
Global Law Experts, 2017
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Best Indian Law Firm
International Legal Alliance Summit Awards, 2017
Ranked No.1
RSG Top 40 Indian Law Firms Ranking, 2017
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