Sebi extends validity of compliance relaxations to cos for rights issues

New Delhi: Markets regulator Sebi on Friday extended relaxations to companies from compliance with procedural norms pertaining to rights issues opening till December 31 amid the coronavirus pandemic.

Earlier, this relaxation was given for rights issues opening till July 31.

"Based on the representations received from the market participants, the validity of relaxations... is further extended and shall be applicable for rights issues opening up to December 31, 2020," the Securities and Exchange Board of India (Sebi) said in a circular.

Under the relaxations, the abridged letter of offer, application form and other issues material to shareholders can be undertaken by electronic transmission as already provided under the ICDR (Issue of Capital and Disclosure Requirements) norms.

Failure to adhere to modes of dispatch through registered post or speed post or courier services due to prevailing coronavirus-related conditions will not be treated as non-compliance.

However, the issuers will have to publish the letter of offer, abridged letter of offer and application forms on the websites of the company, registrar, stock exchanges, and the lead managers to the rights issue.

Further, the issuer company, along with lead manager, needs to undertake all adequate steps to reach out to its shareholders through other means such as ordinary post, SMS, and audio-visual advertisement on television or internet.

The issue-related advertisement needs to contain additional details as regards the manner in which the shareholders who have not been served notice electronically may apply.

The advertisement should also be made available on the website of the issuer, registrar, lead managers and stock exchanges. The issuer needs to make use of advertisements in television channels, radio and internet, among others, to disseminate information related to the application process.