SEBI extends Anchor Investors’ lock-in period in IPO from 1 month to 90 days applicable for all issues opening on or after April 1, 2022 [Read Circular]

The Market Regulator, Securities and Exchange Board of India (SEBI) met in Mumbai under the Chairmanship of Mr. Ajay Tyagi. The Part-Time Members joined the meeting through video conferencing.

The Board approved the proposal to amend various aspects of regulatory framework under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations) and consequential amendment to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as applicable, based on the public consultation process on the proposals recommended by Primary Market Advisory Committee (PMAC). 

In case of book-built issues, a minimum price band of at least 105% of the floor price shall be applicable for all issues opening on or after notification in the official gazette.

“The existing lock in of 30 days shall continue for 50% of the portion allocated to anchor investor and for the remaining portion, lock in of 90 days from the date of allotment shall be applicable for all issues opening on or after April 01, 2022,” the SEBI notified.

For book built issues opening on or after April 01, 2022, the allocation in the NII category shall be revised as follows one third of the portion available to NIIs shall be reserved for applicants with application size of more than two lakh rupees and up to ten lakh rupees; and two third of the portion available to NIIs shall be reserved for applicants with application size of more than ten lakh rupees.

Allotment of securities in case of NII category shall be on‘draw of lots’, as is currently applicable for retail individual investors (RIIs) category (i.e. draw of lots to allot minimum application size to applicants, in case of oversubscription and balance allotment on proportionate basis).

Promoters would be permitted to pledge the shares locked-in pursuant to a preferential issue provided if pledge of such specified securities is one of the terms of sanction of the loan granted by certain financial institutions and the said loan is to be sanctioned to the issuer company or its subsidiary(ies) for the purpose of financing one or more of the objects of the preferential issue.

The Board approved amendment to AIF Regulations, to introduce Special Situation Funds, a sub-category under Category I AIF, which shall invest only in ‘stressed assets’ such as Stressed loans available for acquisition in terms of Reserve Bank of India (Transfer of Loan Exposures) Directions, 2021 or as part of a resolution plan approved under Insolvency and Bankruptcy Code, 2016, Security receipts issued by Asset Reconstruction Companies, Securities of companies in distress, and Any other asset/security as may be prescribed by the Board from time to time.

The Board approved amendments to the SEBI {KYC (Know Your Client) Registration Agency} Regulations, 2011 towards enhancing the role of KYC Registration Agencies (KRAs). As per the approved amendment, KRAs have been made responsible to carry out independent validation of the KYC records uploaded onto their system by the Registered Intermediary (RI) and to maintain an audit trail of the upload / modification / download w.r.t. KYC records of clients. It has also been prescribed that the systems of the RIs and KRAs should be integrated to facilitate seamless movement of KYC documents to and from RIs to KRAs.

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