Minimum Promoter’s Contribution :
In case of public issue or composite issue of convertible debt securities, the promoters shall contribute twenty per cent as stipulated for public issue under Regulation 32(1), either by way of equity shares or by way of subscription to the convertible securities. However, if the price of the equity shares allotted pursuant to conversion is not predetermined and not disclosed in the offer document, the promoters shall contribute only by way of subscription to the convertible securities being issued in the public issue and shall undertake in writing to subscribe to the equity shares pursuant to conversion of such securities.
In case of any issue of convertible securities which are convertible or exchangeable on different dates and if the promoters’ contribution is by way of equity shares (conversion price being pre-determined) such contribution shall not be at a price lower than the weighted average price of the equity share capital arising out of conversion of such securities.
In case of an initial public offer of convertible debt instruments without a prior public issue of equity shares, the promoters are required to bring in a contribution of at least twenty per cent of the project cost in the form of equity shares, subject to contributing at least twenty per cent of the issue size from their own funds in the form of equity shares.
However, if the project is to be implemented in stages, the promoters’ contribution is required to be with respect to total equity participation till the respective stage vis-à-vis the debt raised or proposed to be raised through the public issue.
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