SEBI eases norms for Further Public Offers in view of Covid-19

In its circular, the Securities and Exchange Board of India (SEBI) announced the lowering of the average market capitalisation requirement of public shareholding of the issuer in case of public issue, to Rs 500 crore from the previous Rs 1,000 crore.

Average market capitalisation of public shareholding refers to the sum of daily market capitalisation of public shareholding for a period of one year up to the end of the quarter preceding the month in which the proposed issue was approved by the shareholders or the board of the issuer, divided by the number of trading days.

The regulator further said that as per the temporary changes, in cases where a show cause notice has been issued by the board against the issuer or its promoters or directors or group companies in an adjudication proceeding or prosecution proceedings have been initiated, necessary disclosures in respect of such action, along with its potential adverse impact on the issuer shall be made in the offer documents.

It further said that the Regulation 155 (i) of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 shall be read as: "The issuer or promoter or promoter group or director of the issuer has fulfilled the settlement terms or adhered to directions of the settlement order(s) in cases where it has settled any alleged violation of securities laws through the consent or settlement mechanism with the Board."

These relaxations which come into immediate effect are applicable for FPOs that open on or before March 31, 2021.

The relaxations are not applicable for issuance of warrants, the circular said.

SEBI also advised the stock exchanges to bring the provisions of the circular to the notice of all entities who have listed their equity and convertible securities.