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ARTICLE · 14 MAY 2025

SEBI Revamps Rights Issue Norms: Key Takeaways

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Overhaul changes have been made effective by SEBI vide the amendment dated March 03, 2025. The changes primarily pertain to the Rights Issues and the SME IPOs.

IndiaCorporate/Commercial Law
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Overhaul changes have been made effective by SEBI vide the amendment dated March 03, 2025. The changes primarily pertain to the Rights Issues and the SME IPOs.

Key takeaways with regard to the Rights Issue amendments are as under:

  1. Ineligible Companies:
    • Along with the existing conditions, Companies are now required to ensure that their trading is not suspended as a disciplinary measure on the reference date in order to be eligible to make a rights issue.
  2. Renunciation of Rights Entitlement/ Specific Investors in Rights Issue/ Allotment of Under-subscribed Shares
    • A big relief for the Promoter & Promoter Group, who didn't have the funds to subscribe to the Rights Issue, they can now renounce their Entitlement to specific investors, subject to this disclosure being disclosed in the Offer Document.

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