June 22, 2018

SEBI has decided to amend SAST to grant additional time

1. The requirement of announcing price band five working days before opening of the issue would be reduced to two working days before opening of the issue.
2. Financial disclosures to be made for 3 years as against the present duration of 5 years
3. Restated and audited financial disclosures in the offer document to be made on consolidated basis only. Audited standalone financials of the issuer and material subsidiaries to be disclosed on the website of the issuer company.
4. Incorporation of the principles governing disclosures of Indian Accounting Standards (IndAS) on Indian GAAP (IGAAP) Financials.
5. Threshold for submission of draft letter of offer to SEBI in case of rights issues to be increased to Rs. 10 Crores as against the earlier prescribed Rs. 50 Lakhs.
6. Shortfall of up to 10% in minimum promoters’ contribution may be met by institutional investors such as by foreign venture capital investors, scheduled commercial banks, public financial institutions and insurance companies registered with Insurance Regulatory and Development Authority of India, in addition to Alternative Investment Funds, without being identified as “Promoters”.
7. For a company to be eligible to make a fast track rights issue, it should not have any audit qualifications or adverse opinion.
8. Deletion of chapter on Institutional Placement Programme and provisions pertaining to safety net and IPO grading.
9. With respect to the Promoter group, the concept of immediate relative to be retained as against the proposed concept of ‘relative’. Further, the shareholding threshold for identifying promoter group has been revised from 10% to 20%.
10. In case the promoter is a body corporate, any body corporate in which the promoter holds 20% or more or which holds 20% or more of the promoter would be classified as being part of the same promoter group. Also, in case the promoter is a body corporate, any body corporate in which a group of individuals or companies or combinations thereof, which holds 20% or more of the equity share capital in that body corporate, also holds 20 % or more of the issuer, can be classified as promoter group only if they are acting in concert.
11. Definition of group companies has been made more specific by clarifying that group company/ies, shall include such companies (other than promoter(s) and subsidiary(ies)) with which there were related party transactions, during the period for which financial information is disclosed (3 years), as covered under the applicable accounting standards and also other companies as considered material by the board of the issuer.