SEBI Tweaks The Regulatory Framework For Initial Public Offerings

BACKGROUND

In order to address some of the issues stemming from the recent spate of initial public offerings ("IPO") in India, the Securities and Exchange Board of India ("SEBI")¹ recently introduced certain amendments to the existing regulatory framework for IPOs pursuant to which the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2022² ("ICDR Amendment Regulations") have been notified with effect from January 14, 2022. We have provided a summary of the key amendments introduced by SEBI along with our analysis below.

KEY AMENDMENTS

1. Conditions for objects of the issue

Position under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 ("ICDR Regulations"): Under Regulation 2(1)(r) read with Regulation 7(2) of the ICDR Regulations, issuer companies are permitted to specify upto 25% of the fresh issue size to general corporate purposes, which includes specified purposes