Preferential issue of shares by an Issuer Company having stressed assets

SEBI has further amended the existing provisions of SEBI ICDR Regulations and SEBI SAST Regulations, to accommodate the preferential issue of shares by an Issuer Company having stressed assets, to any Investor, not forming part of promoter or promoter group, at a price, to be determined as per pricing method specified in Regulation 164(A) of SEBI ICDR Regulations and subject to certain other specified conditions. The allotment made under Regulation 164(A) shall be subject to lock-in for a period of three years from the last date of trading approval.

Listed Companies coming up with such preferential issues under Regulations 164(A) of SEBI ICDR Regulations will not trigger mandatory open offers to be made by such investors, under Regulations 3 & 4 of SEBI SAST Regulations.

Effective date: June 23, 2020

Source: Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2020 dated June 23, 2020 & Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2020 dated June 23, 2020