Key Points
SEBI drastically reduces rights issue timeline to enhance capital market efficiency
New regulations provide flexibility in investor allotment
Changes effective from April 7, 2025
Supports faster fundraising for Indian companies
In a circular, the capital markets regulator has also provided flexibility of allotment to specific investors in the rights issue.
“As part of the new framework, in terms of amended Regulation 85 of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (SEBI ICDR Regulations), it is being specified that Rights Issues shall be completed within 23 working days from the date of Board of Directors of the Issuer approving the Rights Issue,” said SEBI.
“In terms of Regulation 87 of SEBI ICDR Regulations and in view of the revised timelines, it is being specified that Rights Issue shall be kept open for subscription for a minimum period of seven days and for a maximum period of thirty days,” it added.
The validation of application bids received for subscribing to the shares in Rights Issue and finalisation of basis of allotment shall also be carried out by the Stock Exchanges and Depositories along with the Registrar to the issue.
The provisions of this circular will come into force from April 07, 2025 and will be applicable to the Rights Issues that are approved by the Board of Directors of the Issuer from the date of coming into force of this circular, according to the markets regulator.
Meanwhile, in the upcoming first board meeting under the leadership of newly appointed Chairperson Tuhin Kanta Pandey, the SEBI is slated to discuss several major regulatory proposals.
The agenda on the cards includes UPI-like protections for demat accounts, ensuring the independence of clearing corporations, expanding the scope of qualified institutional buyers (QIBs), and changes in fee collection by research analysts.
To enhance investor security, the SEBI has proposed implementing a system similar to the Unified Payments Interface (UPI) for demat accounts.
—IANS
