News

SEBI's board on Wednesday gave the nod to amendments to the market regulator's Issue of Capital and Disclosure Requirements (ICDR) Regulations that define and govern how companies raise capital on Dalal Street.

As per the proposed changes, equity shares held by individuals other than promoters will not be allowed to be sold for six months prior to an initial public offer (IPO).

Also, depositories will be able to block the transfer of shares in case they are pledged with banks or other entities and a lock-in cannot be imposed.

If the pledged shares are released or invoked, as per the new rules, the remaining lock-in period will automatically apply to those equity shares.

Companies will provide a precise draft prospectus at the draft red herring prospectus (DRHP) stage itself, enabling investors to understand key information at an early stage.

This will provide potential investors access to vital information about the market-bound company in advance compared to the current practices.

This early prospectus will be called Abridged Prospectus, as per the new rules.