The Securities Exchange Board of India vide press release dated 23.09.2020 has declared its decision to amend SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 to rationalize eligibility criteria and disclosure requirements for Rights Issues. The amendments will be effective from the date it is notified in the Gazette. The amendment is proposed with an objective to make the fund raising through this route, easier, faster and cost effective.
As per the proposed amendment, Mandatory 90% minimum subscription criteria for Rights Issue shall not be applicable to those issuers where object of the issue involves financing other than financing of capital expenditure for a project, provided that the promoters and promoter group of the issuer undertake to subscribe fully to their portion of rights entitlement. Also, Issuer shall be eligible to make Fast Track Rights Issue, in case of pending show-cause notices in respect to adjudication, prosecution proceedings and audit qualification, provided that necessary disclosures along with potential adverse impact on the issuer are made in the letter of offer.
