Base Issue Size, Minimum Subscription, Retention of Over-Subscription Limit and further disclosures in the Prospectus for Public Issue of Debt securities
Summary
This circular establishes a mandatory minimum subscription limit of 75% for public issues of debt securities, with specific exemptions for tax-free bonds. It sets a minimum base issue size of Rs 100 crores and caps the retention of over-subscription funds at 100% of the base issue size. The document mandates granular disclosures regarding the objects of the issue, particularly for NBFCs, and requires additional disclaimer clauses in offer documents.
Text
minimum subscription for public issue of debt securities shall be specified as 75% of the base issue size for both NBFCs and Non NBFC issuers... entire application monies shall be refunded within 12 days from the date of the closure of the issue... issuer shall refund the subscription amount along with interest at the rate of 15% per annum for the delayed period.
issuers issuing tax-free bonds, as specified by CBDT, shall be exempted from the above proposed minimum subscription limit.
Base Issue size shall be minimum Rs 100 crores.
issuers shall be allowed to retain the over-subscription money up to the maximum of 100% of the Base Issue size or any lower limit as specified in the offer document.
limit for retaining the oversubscription shall be the amount, which they are authorised by CBDT to raise in a year or any lower limit, subject to the same being specified in the offer document.
entities coming out with public issue of NCDs shall provide granular disclosures in their offer document, with regards to the 'Object of the Issue' including the percentage of the issue proceeds earmarked for each of the 'object of the issue'.
amount earmarked for 'General Corporate Purposes', shall not exceed 25% of the amount raised by the issuer in the proposed issue.
NBFCs shall have to disclose in their offer document, the details with regards to the lending done by them, out of the issue proceeds of previous public issues, including details regarding lending policy, classification of loans, top ten borrowers, and non-performing loans.
Offer document shall contain the following disclaimer clause in bold capital letters: 'It is to be distinctly understood that submission of offer document to the Securities and Exchange Board of India (SEBI) should not in any way be deemed or construed that the same has been cleared or approved by SEBI.'
Utilization details regarding the Previous Issues of the issuer as well as the Group Companies.
The provisions of this circular shall be applicable for the draft offer document for issuance of debt securities filed with the designated stock exchange on or after July 16, 2014.
Source: SecMarx — Base Issue Size, Minimum Subscription, Retention of Over-Subscription Limit and further disclosures in the Prospectus for Public Issue of Debt securities. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.