SEBI tweaks IPO norms: A cautioned approach
By Sudish Sharma and Sonali Srivastava
The SEBI has on 14 January 2022 notified SEBI (Issue of Capital and Disclosure Requirements) Amendment Regulations, 2022 with respect to changes and obligations that the IPO bound companies have to comply with while filing the Draft Red Herring Prospectuses. The article in this issue of Corporate Amicus seeks to provide an insight on the amendments made under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 and the need to bring such amendments. The authors in this regard deliberate upon the quantitative restrictions on utilization of IPO proceeds for unidentified inorganic growth, quantitative restriction on offer for sale to public in IPO, change of monitoring agency and reporting of utilization of IPO proceeds, lock-in period for anchor investors, and changes in preferential issue. The authors note that the amendments though have called for greater transparency and accountability, they also raise concerns towards red-tapism by the regulatory authority. They also point out that amendments such as increase in lock-in periods and monitoring of the IPO proceeds utilization by a credit rating agency could adversely impact the start-up market in India...
Ratio decidendi
- Decree holders cannot be treated as ‘financial creditors’ under IBC – Supreme Court
- Resolution applicant – Eligibility under Section 29A of the Code cannot be decided by Resolution Professional – NCLAT
- MSMED Act being a special law will override the Arbitration Act in case of any inconsistency – Madras High Court
News Nuggets
- Insolvency – Pending decree execution application does not bar operational creditor from filing IBC Section 9 petition
- Industrial dispute – Settlement between employer and workman not binding if not sent to labour commissioner/conciliation officer
- Director cannot be prosecuted under Section 138 of Negotiable Instruments Act without the company being arraigned as an accused
- Binding nature of electronic contracts – Obligation to pay when arises
- Consumer dispute – Same MRP to be printed for same quantity and quality
- Insolvency – Failure to reply to demand notice within prescribed time under IBC Section 8(1) does not preclude Corporate Debtor from raising issue of pre-existing dispute
- Insolvency – Quantum of debt need not be decided at the stage of admission of petition under IBC Section 7
- Environment protection – Ex post facto environmental clearance when valid
- Arbitration agreement cannot be presumed only on basis of tax invoices
- Arbitration – Court cannot adjudicate sufficiency of stamp duty and nature of contract under Arbitration Section 11
