Reduction in denomination for debt securities and non-convertible redeemable preference shares
Summary
SEBI amends the face value of debt securities and non-convertible redeemable preference shares issued on private placement to Rs. One lakh. This reduction aims to lower entry barriers for non-institutional investors and enhance liquidity in the corporate bond market. The new provisions apply to issues with new ISINs on or after January 1, 2023, with specific transition rules for existing shelf placements.
Text
The face value of each debt security or non-convertible redeemable preference share issued on private placement basis shall be Rs. One lakh.
The face value of the listed debt security and non-convertible redeemable preference share issued on private placement basis traded on a stock exchange or OTC basis shall be Rs. One lakh.
The provisions of this circular shall be applicable to all issues of debt securities and non-convertible redeemable preference shares, on private placement basis, through new ISINs, on or after January 1, 2023.
with respect to a shelf placement memorandum which is valid as on January 1, 2023, the issuer thereof shall have the option while raising funds through tranche placement memorandum, to keep the face value at Rs. Ten lakhs or Rs. One Lakh.
The Circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 55 (1) of the SEBI (Issue and Listing of Non-convertible Securities) Regulations, 2021.
Source: SecMarx — Reduction in denomination for debt securities and non-convertible redeemable preference shares. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.