Adjustment of differential pricing amount at the time of application for allotment of specified securities
Summary
The circular mandates that eligible investors in public issues may pay the net price after adjusting for differential discounts at the time of bidding. It requires Merchant Bankers to disclose this option and ensures Stock Exchanges provide necessary technical provisions for discount adjustment. The directive applies to prospectuses filed on or after June 15, 2011, under powers conferred by the SEBI Act.
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allow investors eligible for differential pricing in public issues to make payment at a price net of discount, if any, at the time of bidding itself
Merchant Bankers shall ensure that appropriate disclosures are given in the offer document / application forms to the effect that investors eligible for discount can make payment after adjusting the discount, if any
For the ease of calculation by investors eligible for differential pricing, it is preferable that discount, if any, is stated in absolute rupee terms subject to maximum discount
Stock Exchanges shall ensure that appropriate provisions for discount adjustment are provided in the bidding platform
Whenever the net payment (post discount) is more than two lakh rupees, the bidding system should be capable of ensuring that such applications are not eligible for discount
Syndicate /Sub syndicate members and SCSBs shall enter the bid price as indicated by the applicant in the price column
Segregation of Investor Categories (i.e. two lakh rupees for retail category), shall be based on the net payment amount(after adjusting for discount)
SCSBs shall carry out the necessary system changes at their end, if any
Merchant Bankers shall create awareness among the investors eligible for discount on account of differential pricing to make payment at price net of discount
All concerned intermediaries are directed to comply with the instructions contained in this circular
This circular shall be applicable on Red Herring Prospectus/Prospectus filed with Registrar of Companies on or after June 15, 2011
This circular is issued in exercise of the powers conferred under Section 11 read with Section 11A of the Securities and Exchange Board of India Act, 1992 read with Regulation 108 of the SEBI(ICDR) Regulations, 2009
Source: SecMarx — Adjustment of differential pricing amount at the time of application for allotment of specified securities. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.