SEBI amended Issue of Capital and Disclosure Requirements, Regulations 2009

SEBI has notified a new set of norms to provide an exit route to the dissenting shareholders in case a listed company diverts from its stated objective of raising funds from the public.

The SEBI has amended SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 and prescribed the conditions and manner of providing Exit Opportunity to dissenting shareholders when Company proposes to make Variations in terms of Contracts or Objects of Prospectus.

The move is aimed at helping the shareholders make an exit if they feel dissatisfied with any change in business plan of the company concerned after raising funds through IPOs, FPOs or any other capital-raising exercise involving public investors. The exit price would be based on the pricing parameters applicable in case of the exit offer given to the existing shareholders in terms of SEBIs Takeover Regulations.

The relevant date for pricing would be the date of the board meeting in which the proposal for change in objects is approved. The new provisions would be applicable on prospective basis for issues which opened after April 1, 2014, the date of commencement of related provisions of the Companies Act, 2013.

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