SEBI amends rule to Facilitate Ease of Doing for Companies Planning IPOs

Current Context: The Securities and Exchange Board of India (SEBI) has indeed made amendments to facilitate ease of doing business for companies planning Initial Public Offerings (IPOs).

• Here are the key changes:
• Change in Offer for Sale (OFS) Size: Any change in the size of OFS requiring fresh filing will be based on only one of the criteria — either issue size in rupee or number of shares.
• Promoter Group Entities and Non-individual Shareholders: Promoter group entities and non-individual shareholders holding more than 5% of the post-offer equity share capital can now contribute toward the shortfall in minimum promoters’ contribution (MPC) without being identified as a promoter.
• Non-promoter Shareholders: Non-promoter shareholders excluding individuals holding more than 5% of the post-offer equity share capital can contribute towards the shortfall in MPC.
• Flexibility in Bid Closing Date: SEBI has provided flexibility in extending the bid closing date on account of force majeure events such as banking strikes or similar circumstances by a minimum of one day instead of the present requirement of a minimum of three days.

Question:

1. In case of force majeure events, what is the minimum extension of the bid closing date provided by SEBI?

• A) One day
• B) Two days
• C) Three days
• D) Four days

Answer: A) SEBI has provided flexibility in extending the bid closing date on account of force majeure events such as banking strikes or similar circumstances by a minimum of one day instead of the present requirement of a minimum of three days.