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NASSCOM’s response to SEBI Consultation Paper on review of public issue framework

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NASSCOM made a submission to Securities Exchange Board of India (SEBI) in response to the Consultation Paper on Review of certain aspects of Public issue framework under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (call for inputs).

The Consultation paper sought feedback on the following recommendations:

  1. A limit of up to 35% of the fresh issue size for deployment on ‘inorganic growth initiatives and GCP’, where the intended acquisition/strategic investment is not identified in the offer document. 
  2. For IPOs of loss making companies where there are no identifiable promoters, divestment of stake by significant shareholders (shareholders holding >20%) be capped at 50% of their pre-issue holding; and the remaining shareholding be locked-in for 6 months post IPO.
  3. Increasing the lock-in period for anchor investors from 30days to 90 days, or, reserving 50% of the anchor book for anchor investors who agree to a lock-in period of 90days.
  4. IPO proceeds under ‘General Corporate Purpose’ be brought under monitoring and be disclosed under the Quarterly Monitoring Agency Report.

Overall, our response highlighted that new age technology companies typically raise funds for expanding into new micro-markets and adding or acquiring new customers, companies, technology etc., and therefore regulations need to recognise this while addressing the gaps, if any, in investor/shareholder protection.

We suggested that a primary tool to ensure this may be through appropriate disclosures by the issuer company. However, prescriptive norms that may unduly restrict a company’s ability to raise capital from the public should be avoided if India is to grow as an attractive ecosystem for new entrepreneurs.

Our detailed response is attached below. For more information, kindly write to or