AZB Capital Markets Update ICDR 2018 PDF

AZB & Partners Privileged and confidential
November 2018 AZB Capital Markets Update
SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND

DISCLOSURE REQUIREMENTS) REGULATIONS, 2018
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INTRODUCTION AND SCOPE
The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“ICDR 2018”) have been notified on September
11, 2018 and have been effective since November 10, 2018. Accordingly, the Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009 (“ICDR 2009”) would stand rescinded and repealed by the ICDR 2018.
This Memorandum sets out a snap-shot of the key changes brought by the ICDR 2018 as well as a detailed comparison of the ICDR 2009 vis-à-vis the ICDR
2018. Accordingly, this Memorandum has been segregated into the following segments:
(a) Section I – A snap-shot of the key structural and global changes;
(b) Section II - Key regulatory changes – key points to be noted, if applicable (only in context of public issuances on the main board);
(c) Annex A – A tabular comparison of the provisions of the ICDR 2018 with the provisions of the ICDR 2009; and
(d) Annex B – Comparison of the index/ format of ICDR 2018 with the provisions of the ICDR 2009.
While the ICDR 2018 governs, the process of issuance and listing of securities, inter-alia, through public issuances (on the Main Board as well SME exchange),
rights issues, preferential issuances, QIP and issuance of IDR, this Memorandum primarily focusses on the changes in the ICDR 2018 vis-à-vis public offerings
on the Main Board. For a detailed list of changes, please refer to Annex A.
Glossary of key terms:
(a) AIF – Alternative investment fund

(b) CA – Chartered Accountants
(c) Companies Act – The Companies Act, 2013, as amended
(d) DRHP – Draft Red Herring Prospectus
(e) ESOP – Employee stock option plan
(f) FEO Act - Fugitive Economic Offenders Act, 2018 (17 of 2018)
(g) FPO – Further public offer
(h) FDI – Foreign direct investment
(i) FPI (as used in the summary of the regulations) – Foreign portfolio investor other than Category III foreign portfolio investor
(j) FVCI - Foreign venture capital investors
(k) IDR - Indian Depository Receipts
(l) IPO – Initial public offering of equity shares
(m) IPP – Institutional placement programme
(n) IRDAI - The Insurance Regulatory and Development Authority of India
(o) QIP – Qualified institutions placement
(p) LLP – Limited Liability Partnership
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(q) LODR Regulations – The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended
(r) Main Board - A recognised stock exchange having nationwide trading terminals, other than SME exchange
(s) MCA – Ministry of Corporate Affairs
(t) NBFC-SI – Systematically important non-banking financial companies
(u) NII – Non-institutional investor
(v) RHP – Red Herring Prospectus
(w) SEBI – Securities and Exchange Board of India
(x) SCRR - Securities Contracts (Regulation) Rules
(y) SBEB Regulations - Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014
(z) SEBI Act – Securities Exchange Board of India Act, 1992, as amended
(aa) OFS – Offer for sale
(bb) PFI - Public financial institution as defined under the Companies Act, 2013
(cc) Public issue/ offer – IPO and/or FPO
(dd) SME – Small and medium enterprises
(ee) QIB – Qualified institutional buyer
(ff) VCF – Venture Capital Fund
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SECTION I – A SNAP-SHOT OF KEY STRUCTURAL AND GLOBAL CHANGES
The format of ICDR 2009 has been re-structured in ICDR 2018 to, inter-alia, make the regulations more user friendly and align the regulations with the changes
to other statutes and regulations. While the key structural and global changes in the format of ICDR 2018 (excluding in the schedules) is stated below, we have
set out a detailed comparison of the index of ICDR 2009 and ICDR 2018 as Annex B:
 Provisions of IPO on the Main Board, rights issue and FPO have been segregated into different chapters. Accordingly, the common conditions for public
offers and rights issues as existing in ICDR 2009 have been done away with.
 ICDR 2009 stated provisions for public issuances (IPOs and FPOs) at one place. However, the ICDR 2018 segregates provisions of the IPOs from FPOs.
 Provisions pertaining to IPP have been deleted from ICDR 2018.
 Further, certain new terms have been introduced and/or defined in the ICDR 2018, including, lead managers, main board, updated draft red herring
prospectus and fugitive economic offenders.
 The ICDR 2018 now requires disclosure of financial information on a consolidated basis for a period of three immediately preceding fiscals in the DRHP/
offer document and stub period.
 References to the Companies Act, 1956 have been replaced with the corresponding provisions in the Companies Act, 2013.
 The term ‘selling shareholder’ has been introduced in the ICDR 2018.
 The promoters and directors of the issuers not being declared as a ‘fugitive economic offender’ has been included as an eligibility requirement for all forms
of issuances provided under the ICDR 2018.
 In relation to QIPs, enabling provisions for an offer for sale component in QIPs have been included.
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SECTION II – KEY REGULATORY CHANGES (PUBLIC ISSUANCES ON THE MAIN BOARD)
PART A – KEY AMENDMENTS TO DEFINITIONS AND CONCEPTS
1. APPLICABILITY OF THE ICDR 2018
(a) Key changes
 While the ICDR 2018 specifies the date on which the said regulations would be effective, it does not clarify the applicability on offer documents to
be filed in relation to deals for which DRHPs have already been cleared by SEBI.
 Threshold of aggregate value of issue size for rights issues by listed issuers has been increased from Rs. 50 lacs to Rs. 10 crores.
2. DEFINITION OF ‘ASSOCIATE’
(a) Key changes
 New definition included in ICDR 2018.
 Who is an associate of an issuer? – An entity (not being a subsidiary but including a joint venture company) in which an issuer exercises control of
at least 20 % of total voting power or control of or participation in business decisions under an agreement.
(b) Key points to be noted
 The ICDR 2018 provides the definition of associate only in context of an issuer.
 Companies Act vis-à-vis ICDR 2018 - The Companies Act defines ‘associate companies’, i.e., the definition applies to companies only (including
joint ventures). However, while the ICDR 2018 refers to the Companies Act in context of the meaning of ‘associate’, the language of the definition
appears to be agnostic to the nature in which an associate is incorporated, i.e., whether such associate is a company or body corporate or firm or
partnership or LLP. Further, while the ICDR defines the term ‘associate’ and the Companies Act defines the term ‘associate companies’, in context
of the disclosures in the offer document it should be discussed whether the two definitions should be read harmoniously in line with the practice
thus far, i.e., to include entities irrespective of the way in which they are incorporated.
 Companies Act vis-à-vis Ind-AS - The term ‘Associate’ is also defined under the Accounting Standard (IND AS-28), which is broader than
definition under the Companies Act. Further, under the IND-AS, ‘Significant Influence’ is the power to participate in the financial and operating
policy decisions of the investee, and influence is presumed to be significant if the shareholding threshold reaches 20 %, which is similar to
Companies Act, 2013. Further, on account of the difference between the Companies Act and Ind-AS, there may be a disconnect in the ‘associates’
disclosed under the financial statements vis-à-vis the general disclosures in the other sections of the offer document.
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3. DEFINTION OF EMPLOYEES
(a) Key changes
 Definition has been aligned to the Companies (Share Capital and Debenture) Rules, 2014, as amended and SBEB Regulations.
 A proviso has been include to distinguish between the definition applicable for general disclosures (ICDR 2018 applies) vis-à-vis the definition for
stock option scheme (SBEB Regulations apply). In this context, it should be noted that, the definition of ‘employee’ under the ICDR 2018 and the
SBEB Regulations has almost been aligned.
 Requirement of employees being ‘full-time’ has been deleted.
 Scope of the definition has been narrowed vis-à-vis the ICDR 2009 to exclude (i) employees of material associates of the issuer and (ii) directors
who either themselves or through any body corporate, directly or indirectly hold more than 10 % of the issuer’s outstanding equity shares. Further,
the amended definition also includes certain language changes, including, replacing the term ‘immediate relatives of the promoters’ with ‘promoter
group’ and ‘holding company’ with ‘promoter’.
 While the definition of ‘employees’ under the ICDR 2018 as well as the SBEB Regulations refer to ‘permanent employees’, it should be noted that
Regulations 5(2) (exemption for outstanding stock options from eligibility requirements) and 17 (a) (exemption from one year lock-up) has been
clarified to include employees who are not currently on the pay-roll of the issuer. While this clarification does not have any bearing to the extent
of reservation and pricing, this is a welcome change for extending the benefits of outstanding stock options/ equity shares from such options on
employees who are no longer on the payrolls of the issuer.
 While past employees get benefit under the lock-in provisions, the excluded categories will no longer be eligible for employee reservation and
differential pricing.
 On account of alignment in the said definition with the one under the SBEB Regulations, i.e., exclusion of employees of associates and directors
holding above 10% of the outstanding equity shares, there should not be a disconnect between employees eligible for employee reservation as well
as employees under the ESOP disclosure.
4. FUGITIVE ECONOMIC OFFENDER – ELIGIBILITY REQUIREMENT FOR ALL FORMS OF ISSUANCES UNDER THE ICDR 2018
(a) Key changes
 New inserted definition and corresponding eligibility provisions in light of the FEO Act.
 No issuer shall be eligible to make any of the issuances provided for under ICDR 2018 if any of its directors or promoters are declared to be
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fugitive economic offenders.
 This eligibility requirements extend only to directors or promoters of the issuer.
 Eligibility certificate from the issuer and certificates from the directors, promoters and selling shareholders (if applicable) to include undertaking to
this effect. Further, the Offer Agreements should include representations and warranties to this effect.
5. GROUP COMPANIES (IDENTIFICATION AND LITIGATION APPROACH)
(a) Key take away
 What are group companies? (i) companies with which the issuer has had related party transactions during the past three fiscals and stub period (as
appearing the audit report and financial statements), and (ii) other companies considered material by the board.
 Promoters and subsidiaries have been excluded from the definition.
 Related party test is only vis-à-vis the financials disclosed in the offer document, i.e., past three fiscals and stub.
 Litigation – The ICDR 2018 segregates the disclosure requirement for litigations of group companies from the general litigation disclosure of the
issuer, promoter, directors and subsidiaries.
 What litigations are to be disclosed? – Only such litigations of the group companies which in the judgement of the issuer impacts such issuer
would need to be disclosed.
 Counsels and lead managers to rely on the related party schedule disclosed in the last three years’ financials and stub period. Transactions between
the dates as on which related party schedule is included in the DRHP and till the date of filing of DRHP, shall also be procured from issuer.
Further, in relation to the materiality test for litigations, discussions would need to be had on a subjective basis with the issuer.
6. ISSUER
(a) Key changes
 Definition covers only companies and body corporates and does not include LLPs or funds or firms whether incorporated in or outside India.
 This definition clarifies now that a selling shareholder is not to be considered as an ‘issuer’ and that only the entity whose shares are being listed is
to be considered as an ‘issuer’
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7. PROMOTER
(a) Key changes
 The definition has been aligned with Section 2(69) of the Companies Act. Accordingly, now the identification of a promoter also has to be based
on the persons identified in the annual return filed by the company.
 Threshold for shareholding vis-à-vis certain categories of shareholders has been increased from 10 % to 20 %.
 The shareholding linked exemption from being identified as a promoter has been extended to additional categories of investor, i.e., VCFs, AIFs,
FVCIs and insurance companies in addition to financial institution, scheduled commercial bank, foreign portfolio investor other than Category III
foreign portfolio investor, mutual fund (who shall not be deemed to be promoters merely because they hold 20% or more in the issuer).
Consequential changes have been made in various provisions, including, the definition of promoter group.
.
 Persons instrumental in formulation of a plan or programme of the offer as promoter has now been removed.
 Proviso under the ICDR 2009 in relation to a financial institution, scheduled commercial bank, foreign portfolio investor other than Category III
foreign portfolio investor and mutual funds continuing to be deemed as promoters of the subsidiaries or companies promoted by them or mutual
funds sponsored by them has been deleted.
 The proviso to the definition of ‘promoters’ does not carve out other categories of investors under the FDI route.
 Since the definition of ‘promoter’ in the ICDR Regulations has been aligned with the provisions of the Companies Act, 2013, as customarily done,
the annual returns of the issuer should be checked to see if any persons in addition to the promoters being identified in the DRHP. Besides this,
other traditional tests have to be done/ questions asked, to correctly determine who is the promoter of the Company.
8. PROMOTER GROUP
(a) Key changes
 The threshold vis-à-vis promoter related entities has been increased from 10% to 20% shareholding.
 VCFs, AIFs, FVCIs, insurance companies or entities belonging to any other category as specified by SEBI from time to time are exempt from
being identified as a promoter group merely by virtue of the fact that 20% or more of the equity share capital is held by them (except with respect
to such entities’ subsidiaries or companies promoted by them or for the mutual funds sponsored by them). They will need to satisfy the other
conditions prescribed in order to meet the test of a promoter group entity.
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 While the term ‘relative’ has been used in certain places within the definition instead of ‘immediate relative’, for purpose of Promoter Group
identification, the term relatives should be read as ‘immediate relatives’ in line with the intent on the coverage.
9. QUALIFIED INSTITUTIONS PLACEMENT
(a) Key changes
 QIPs can now be undertaken through or include an offer for sale by promoters and / or promoter group as well.
 Post an IPO, issuers can now meet the minimum dilution requirement as per the SCRR through a QIP as well.
 The format and disclosures of a placement documents for QIPs would need to be relooked.
10. SELLING SHAREHOLDERS
(a) Key changes
 New definition of ‘selling shareholders’ and corresponding provisions for disclosures and eligibility requirements have been included.
 The amendments and inclusions have been made only in context of public issuances (for both Main Board and SME listings), right issues (where
disclosures are made in terms of Part A of Schedule VI) and disclosures in offer documents for issuance of IDRs.
 Vis-à-vis confirmations from selling shareholders – Considering that the ICDR 2018 states specific requirements for selling shareholders stated
below is the list of confirmations to be obtained from the selling shareholders as has been agreed to amongst certain counsels and bankers:
(i) If the selling shareholders are not prohibited from accessing the capital market or debarred from buying, selling or dealing in securities under
any order or direction passed by SEBI or any securities market regulator in any jurisdiction or any other authority/court.
(ii) Whether the selling shareholder is a wilful defaulter as per the definition in the ICDR 2018.
(iii) Whether the selling shareholder is a fugitive economic offender (applicability on foreign selling shareholder to be assessed).
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(iv) Whether the selling shareholder has committed any securities law violation in any jurisdiction.
(v) Whether the selling shareholder has complied with the Companies (Significant Beneficial Ownership) Rules, 2018 (“SBO Rules”).
 Vis-à-vis confirmation under the SBO Rules
(i) For the purpose of making the above confirmation, including vis-à-vis the issuer, counsels to review forms prescribed under SBO Rules, i.e.,
forms BEN 1, BEN 2 and BEN 3.
(ii) It relation to point (i), above, it should be noted that the MCA has extended the timeline for filing of BEN 1, BEN 2 and BEN 3 until further
notice on account of, inter-alia, clarifications sought by market participants, in relation to applicability of the said rules on certain other
categories of pooled investment vehicles/ investment funds. Therefore, if any DRHPs are filed before such notification on timeline for filing of
the said forms is issued by MCA, compliance with the requirement of the ICDR 2018 in relation to confirmation by selling shareholders with
the SBO Rules may be difficult.
(iii) SBO Rules do not apply to the holding of shares of companies/body corporates, in case of pooled investment vehicles/investment funds such as
mutual funds, AIFs, Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) regulated under SEBI Act. Therefore,
these rules may not apply to every selling shareholder. Accordingly, we may have to assess the applicability on a case to case basis vis-à-vis the
documentation on deals.
 As per the ICDR Regulations, the term ‘securities law’ has not been used in the context of a main board listing. Further, the securities law
violation in any jurisdiction is not an eligibility requirement vis-à-vis the issuer, promoter, director or promoter group. While there may have been
instances where investors may have provided this undertaking, it may lead to negotiations at their request.
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PART – B – KEY PROCEDURAL AMENDMENTS
1. ELIGIBILITY FOR PUBLIC ISSUES ON THE MAIN BOARD
(a) Key changes
 Eligibility requirements for promoters, directors and selling shareholders:
(i) Debarment of selling shareholders from accessing the capital markets has now been made an eligibility condition. This change, however, is
consistent with the market practice.
(ii) Clarified that restriction shall not apply to the person or entities who were debarred in the past and the period of debarment is already over as
on the date of filing of DRHP with SEBI.
(iii) A new criterion of eligibility in relation to promoters and directors of an issuer not being a fugitive economic offender has been included.
 Convertibles linked eligibility:
(i) An issuer is eligible to undertake an initial public offer even if there are outstanding options granted to an employees, irrespective of whether
such person is currently an employee or not, pursuant to an employee stock option scheme or the existing outstanding convertible securities
which are required to be converted on or before the date of filing of the RHP (in case of book built issue). Accordingly, the previous practice of
ensuring that options held by past employees have lapsed or are exercised before the filing of the DRHP, is no longer relevant.
 Financial information linked eligibility:
(i) Condition of issue size including the previous issues in same fiscal year, not exceeding five times the net worth has been deleted.
(ii) Average operating profits to be calculated on immediately preceding three years and each preceding year shall have operating profits.
(iii) The ICDR 2018clarifies that the net tangible assets, average operating profits, net worth and revenue has to be calculated on a restated and
consolidated basis.
 OFS linked eligibility:
(i) It has been clarified that the offer shares arising from convertible instruments can now be converted before filing of RHP.
 General conditions of eligibility:
(i) In line with the provisions of Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2018 (notified on September 10,
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2018), the shareholding of the promoters of an issuer shall have to be dematerialized at the DRHP stage.
2. Minimum promoters’ contribution, its eligibility, pledging and certification
(a) Key changes
 Who can make the minimum promoters’ contribution? – In addition to the promoters of an issuer, certain regulated entities such as AIF or FVCI
or scheduled commercial banks, or PFIs or insurance companies registered with IRDAI are now permitted to contribute in order to meet the
shortfall in minimum contribution, subject to a limit of 10% of the post issue-capital.
 Would the additional categories of shareholders making the minimum promoters’ contribution would be deemed as promoters? - No, subject to the
shareholding linked threshold mentioned in the said definition.
 Ineligibility of securities for minimum promoters’ contribution? - Ineligibility conditions have now extended to the securities which are
contributed towards promoters’ contribution by the additional regulated entities identified above, i.e., securities acquired by promoters, AIFs,
FVCIs or scheduled commercial banks or PFIs or insurance companies registered with IRDAI, during the one year at a price lower than the offer
price of the IPO, shall not being eligible for minimum promoters’ contribution.
 Pledging – Now the promoters’ contribution and other securities held by the promoters (and locked-in) can also be pledged with NBFC-SI and
housing finance companies.
 Effectiveness of lock-in on minimum promoters’ contribution - In line with the ICDR 2009, the ICDR 2018 provides that lock-in on minimum
promoters’ contribution is effective till the later of the date of allotment in the IPO or the date of commencement of commercial production.
However, the definition of the term ‘date of commencement of commercial production’ has been amended to mean the last date of the month in
which commercial production of the ‘project’ in respect of which the IPO proceeds are proposed to be utilized as per the DRHP/ offer documents,
is expected to commence.
 Certification for minimum promoters contribution - Statutory auditors and not independent CA, to certify the amount paid as well as credited to
the issuer’s account by each of the promoters.
 Change in auditor deliverables to include the certificate on promoters’ contribution. Further, discussions with auditors should be held to obtain
certification instead of agreed upon procedures.
3. Face value of equity shares
(a) Key changes
 No specific mechanism or requirement for determining the face-value of equity shares of the issuer.
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4. Price and price band
(a) Key changes
 Timeline for announcement of floor price/ price band has been reduced from at least 5 working days before the opening bid to at least 2 working
days before the issue.
 Workings and timelines for the price band, including, deliverable timelines from the ad-agency for the floor price/ price band advertisement and
other related points to be worked around the revised timeline.
5. Underwriting
(a) Key changes
 Scope of underwriting obligation: Now the scope of the underwriting obligation is for at least 90 % of the offer through the offer document.
Therefore, underwriting can be done only to the extent of minimum subscription for pure fresh issue and to the extent of meeting the public float
requirements, i.e., 10% or 25% in pure OFS. Accordingly, underwriters can limit their obligation to the extent of minimum subscription.
 Underwriting obligation only to ensure that the IPO is not a failure.
 If OFS shares are not subscribed in addition to the unsubscribed fresh issue shares, such shares would be transferred back to the sellers.
6. Reservation on competitive basis
(a) Key changes
 Reservation can be made: For employees (as defined under the ICDR 2018) and shareholders (other than the promoters and promoter group) of
listed subsidiaries or listed promoter companies.
 Reservation excludes: New provision excludes, promoter group in addition to promoters, shareholders of listed group companies and persons
associated with the issuer or depositors, bondholders or subscribers to the services with the issuer.
 In line with the definition of ‘employee’ under the ICDR 2018, only the following would qualify as employees for the purpose of reservation in the
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public offer, permanent employee, working in India or outside India, of the issuer or of the promoters or subsidiary company of the issuer, or a
non-independent director of the issuer (who either himself/herself or through their relatives or through any body corporate, directly or indirectly,
does not hold more than 10 % of the outstanding equity shares of the issuer).
 Regulation 33 (1) (b), inter-alia, states that reservation can be made for shareholders of a listed promoter companies. Therefore, in case the
promoter is a listed body corporate the interpretation of the present regulation would have to be looked at.
7. Minimum subscription – Timeline for refund and interest
(a) Key changes:
 Timeline for refund: Maximum 15 days from issue closure.
 Interest rate for delay in refund/ unblocking /allotment: In case of delay in refund, unblocking or allotment, now the interest payable by the issuer
is specified as 15 % per annum.
(b) Key points to be noted:
 Timeline of payment of interest is not specified in the aforementioned regulation. Accordingly, the DRHP/ offer document would continue with
similar disclosures to this extent.
 The obligation of paying interest on delay in allotment/ unblocking/ refunds continues to be that of the issuer.
8. Subscription period
(a) Key changes
 Flexibility for extension of offer period up to 10 working days on account of additional scenarios such as force majeure, banking strike or similar
circumstances.
(b) Implication and analysis:
 The additional scenarios under which the offer can be extended shall have to be recorded in writing by the issuer.
9. Oversubscription
(a) Key changes:
 Threshold for allotment in case of oversubscription has been reduced to 1 % of the net offer to public from 10 % of the net offer to public.
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 The ICDR 2018 now necessitates an additional involvement of the designate stock exchange by providing for a consultation with them for the said
oversubscription.
10. Responsibility of the lead managers – Timeline
(a) Key changes:
 Timeline of responsibility: Responsibility of the lead managers has now been restricted until the issue completion.
 Scope of responsibility: Responsibility of the lead managers is now clarified to be only to the issue and issue related matters.
 Adequate carve outs in the DRHP/ offer document and offer agreement should be included.
11. Pre-IPO/ Restriction on further capital issues
(a) Key changes:
 For further capital issuances between the date of filing the draft offer document and the listing of the specified securities offered, it is required to
disclose details of either the number of securities proposed to be issued or amounts proposed to be raised in the DRHP/ offer document and not
both.
 The ICDR 2018 as was the case in the ICDR 2009 contemplates only issuance of securities. However, as was done under the ICDR 2009, the
intent of the said regulation would have to be read to cover pre-IPOs through secondary sales as well.
12. Cap on NII
(a) Key changes
 New provision included.
 Maximum application by a NII shall not exceed the total number of securities offered in the issue less the total number of securities offered to
QIB.
(b) Implication and analysis
 Appropriate language should be factored in the DRHP/ offer documents, particularly in the section “The Offer” and other back-sections.
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ANNEX A
A tabular comparison of the provisions of the ICDR 2018 with the provisions of the ICDR 2009
Sr. Chapter Provision as per SEBI (Issue of Capital Provision as per SEBI (Issue of Remarks
No. and Disclosure Requirements) Capital and Disclosure Requirements)
Regulations, 2009 (“ICDR 2009”) Regulations, 2018 (“ICDR 2018”)
Chapter I – Preliminary
1. Definition of Regulation 2 (1) (b) Regulation 2 (1) (b) 1. Cover pages of offer
“Advertisement” documents has been
Defines it to include Defines it to include: deleted from the definition.
1. notices, 1. notices,
2. brochures, 2. brochures,
3. pamphlets, 3. pamphlets,
4. show cards, 4. show cards,
5. catalogues, 5. catalogues,
6. hoardings, 6. hoardings,
7. placards, 7. placards,
8. posters, 8. posters,
9. insertions in newspaper, 9. insertions in newspaper,
10. cover pages of offer documents, pictures, and
11. pictures, and 10. films in any print media or
12. films in any print media or electronic media, radio,
electronic media, radio, television programme.
television programme.
2. Definition of Associate was not defined under the Regulation 2 (1) (e) 1. New definition has been
“Associate” ICDR 2009. included to align with the
Companies Act.1
Defines a person which is an associate
1
Section 2(6) of the Companies Act defines associate as follows:
““associate company”, in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the
company having such influence and includes a joint venture company.
Explanation.—For the purpose of this clause:
(a) the expression "significant influence" means control of at least twenty per cent. of total voting power, or control of or participation in business decisions under an agreement;
(b) the expression "joint venture" means a joint arrangement whereby the parties that have joint control of the arrangement and have rights to the net assets of the arrangement;”
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of the issuer and as defined under the
Companies Act, 2013 (“Companies 2. The ICDR 2018 provides
Act”). the definition of associate
only in the context of an
issuer.
3. Companies Act vis-à-vis

ICDR 2018 - The
Companies Act defines
‘associate companies’, i.e.,
the definition applies to
companies only (including
joint ventures). However,
while the ICDR 2018
refers to the Companies
Act in the context of the
meaning of ‘associate’, the
language of the definition
appears to be agnostic to
the nature in which an
associate is incorporated,
i.e., whether such associate
is a company or body
corporate or firm or
partnership or LLP.
Further, while the ICDR
2018 defines the term
‘associate’ and the
Companies Act defines the
term ‘associate
companies’, in the context
of the disclosures in the
offer document it should be
discussed whether the two
definitions should be read
harmoniously in line with
16
the practice thus far, i.e., to
include entities irrespective
of the way in which they
are incorporated.
4. Companies Act vis-à-vis

Ind-AS - The term
‘Associate’ is also defined
under the Accounting
Standard (IND AS-28),
which is broader than
definition under the
Companies Act. Further,
under the IND-AS,
‘Significant Influence’ is
the power to participate in
the financial and operating
policy decisions of the
investee, and influence is
presumed to be significant
if the shareholding
threshold reaches 20%,
which is similar to
Companies Act. Further,
on account of the
difference between the
Companies Act and Ind-
AS, there may be a
disconnect in the
‘associates’ disclosed
under the financial
statements vis-à-vis the
general disclosures in the
other sections of the offer
document.
17
3. Definition of “Book Regulation 2 (1) (f) Regulation 2 (1) (g) 1. Insertion of the coupon is
Building” relevant with respect to
Defines it as a process undertaken to elicit Defines it as a process undertaken to Indian Depository Receipts
demand and to assess the price for elicit demand and to assess the price for and debt securities.
determination of the quantum or value of determination of the quantum or value
specified securities or Indian Depository or coupon of specified securities or
Receipts, as the case may be, in Indian Depository Receipts, as the case
accordance with these regulations. may be, in accordance with these
regulations.
4. Definition of “Lead Regulation 2 (1) (g) Regulation 2 (1) (cc) 1. Definition of lead manager
Manager”/ “Book has been inserted in place
Runner” Defines it as a merchant banker appointed Defines it as a merchant banker of book runner.
by the issuer to undertake the book registered with the Board and appointed
building process. by the issuer to manage the issue and in
case of a book built issue, appointed by
the issuer to act as the book running lead
manager(s) for the purposes of book
building.
5. Definition of “Control” Regulation 2 (1) (i) Regulation 2 (1) (i) 1. Reference to erstwhile
takeover code has been
It shall have same meaning as assigned to It shall have the same meaning as replaced with extant
it under clause (c) of sub-regulation (1) of assigned to it under the Securities and takeover code.
regulation 2 of the Securities and Exchange Board of India (Substantial
Exchange Board of India (Substantial Acquisitions of Shares and Takeovers)
Acquisitions of Shares and Takeovers) Regulations, 2011
Regulations, 1997.
6. Definition of Regulation 2 (1) (l) Regulation 2 (1) (l) –

“Designated Stock
Exchanges” Defines it as a recognised stock exchange Defines it as a recognised stock
in which securities of an issuer are listed exchange having nationwide trading
or proposed to be listed and which is terminals chosen by the issuer on which
chosen by the issuer as a designated stock securities of an issuer are listed or
exchange for the purpose of a particular proposed to be listed for the purpose of a
issue of specified securities under these particular issue of specified securities
18
regulations: under these regulations:
Provided that where one or more of such Provided that, the issuer may choose a
stock exchanges have nationwide trading different recognised stock exchange as a
terminals, the issuer shall choose one of designated stock exchange for any
them as the designated stock exchange: subsequent issue of specified securities.
Provided further that subject to the

provisions of this clause, the issuer may
choose a different recognised stock
exchange as a designated stock exchange
for any subsequent issue of specified
securities under these regulations.
7. Definition of “Draft Draft Letter of Offer was not defined Regulation 2 (1) (m) New insertion.
Letter of Offer” under the ICDR 2009.
“Draft Letter of Offer” means the draft
letter of offer filed with Securities and
Exchange Board of India (“SEBI”) in
relation to a rights issue under these
regulations
8. Definition of “Draft Draft Offer Document was not defined Regulation 2 (1) (n) New insertion.
Offer Document” under the ICDR 2009.
“draft offer document” means the draft
offer document filed with the Board in
relation to a public issue under these
regulations
9. Definition of Regulation 2 (1) (m) Regulation 2 (1) (o) 1. This change aligns the
“Employee” definition under the
Companies (Share Capital
Defines it as: Defines it as: and Debentures) Rules,
(a) permanent and full-time (a) permanent employee, 2014.
employee, (b) working in India or outside
2. A proviso has been
(b) working in India or abroad, of India, of the issuer or of the
included to distinguish
19
the issuer or of the holding promoters or subsidiary between the definition
company or subsidiary company company of the issuer, or a applicable for general
or of that material associate(s) of director of the issuer, whether disclosures (ICDR 2018
the issuer whose financial whole-time or not. applies) vis-à-vis the
statements are consolidated with definition for stock option
the issuer’s financial statements Does not include (i) promoters, (ii) a scheme (SEBI (Share
as per Accounting Standard 21, person belonging to the promoter group; Based Employee Benefits)
(c) or a director of the issuer, or (iii) a director who either Regulations, 2014 apply).
whether whole time or part time, himself/herself or through their relatives In this context, it should be
and or through any body noted that, the definition of
corporate, directly or indirectly, holds ‘employee’ under the
more than ten per cent. of the ICDR 2018 and the SEBI
Does not include (i) promoters and (ii) an (Share Based Employee
immediate relative of the promoter (i.e., outstanding equity shares of the issuer.
Benefits) Regulations,
any spouse of that person, or any parent, 2014has almost been
brother, sister or child of that person or of aligned.
the spouse).
3. Requirement of employees
being ‘full-time’ has been
deleted.
4. Scope of the definition has
been narrowed vis-à-vis the
ICDR 2009 to exclude: (i)
employees of material
associates of the issuer;
and (ii) directors who
either directly or indirectly
hold more than 10% of the
issuer’s share capital.
Further, the amended
definition also includes
certain language changes,
including, replacing the
term ‘immediate relatives
of the promoters’ with
‘promoter group’ and
‘holding company’ with
20
‘promoter’.
5. While the definition of

‘employees’ under the
ICDR 2018 as well as the
SEBI (Share Based
Employee Benefits)
Regulations, 2014 refer to
‘permanent employees’, it
should be noted that
Regulations 5(2)
(exemption for outstanding
stock options from
eligibility requirements)
and 17(a) (exemption from
one year lock-up) has been
clarified to include
employees who are not
currently on the pay-roll of
the issuer. While this
clarification does not have
any bearing to the extent of
reservation and pricing,
this is a welcome change
for extending the benefits
of outstanding stock
options/ equity shares from
such options on employees
who are no longer on the
payrolls of the issuer.
6. The excluded categories

will no longer be eligible
for employee reservation
and differential pricing.
7. On account of alignment in
21
the said definition with the
one under the SEBI (Share
Based Employee Benefits)
Regulations, 2014, i.e.,
exclusion of employees of
associates and directors
holding above 10%, there
should not be a disconnect
between employees
eligible for employee
reservation as well as
employees under the ESOP
disclosure. Further,
outstanding options held by
such a director or
employee of material
associate will not be
exempted under:
a. Regulation 5(2) of the
ICDR 2018 (
exemption to
outstanding stock
options from
conversion ); and
b. Regulation 17(a) of the
ICDR 2018
(exemption from one
year lock-in to shares
resulting from stock
options).
8. Unlike the ICDR 2009,
now definition of employee
refers to employee of
“promoter” and not
“holding company.”
22
10. Definition of “fugitive The concept of a fugitive economic Regulation 2(1) (p) 1. An issuer is not eligible to
economic offender” offender was not there in the ICDR 2009. make an initial public
offer, if any of its
Defines it as an individual who is promoters or directors is a
declared a fugitive economic offender fugitive economic
under Section 12 of the Fugitive offender. Similar eligibility
Economic Offenders Act, 2018. requirement has been
included for all other forms
of issuances pursuant to the
ICDR 2018.
2. Please also see ‘Entities

not eligible to make an
Initial Public Offer’ at
serial number 37 below.
11. Definition of “General Regulation 2 (1) (na) Regulation 2 (1) (r) 1. The ICDR 2018 now
Corporate Purposes” specifically includes draft
Defines it as purposes for which no Defines it as purposes for which no letter of offer and offer
specific amount is allocated or any specific amount is allocated or any document for the general
amount so specified towards General amount so specified towards general corporate purpose.
Corporate Purpose or any such purpose corporate purpose or any such purpose
by whatever name called, in the draft by whatever name called, in the draft
offer document filed with SEBI: offer document, draft letter of offer, or
the offer document:
Provided that any issue related expenses
shall not be considered as a part of Provided that any issue related expenses
General Corporate Purpose merely shall not be considered as a part of
because no specific amount has been general corporate purpose merely
allocated for such expenses in the draft because no specific amount has been
offer document filed with SEBI. allocated for such expenses in the draft
offer document, draft letter of offer or
the offer document.
12. Definition of “Group Schedule VIII Regulation 2 (1) (t) 1. Unlike under the earlier
Companies” regime, now the
identification has to be
23
It was defined as: Defines it as: done on the basis of last
(i) such companies as covered under (i) such companies (other than three years’ financials and
the applicable accounting promoter(s) and stub period.
standards, and subsidiary/subsidiaries) with
(ii) other such companies as which there have been related 2. Transactions between the
considered material by the board party transactions, during the dates as on which related
of the issuer. period for which financial party schedule is included
information is disclosed, as in the DRHP and till the
covered under the applicable date of filing of DRHP,
accounting standards, and shall also be procured from
(ii) other such companies as issuer.
considered material by the
board of the issuer. 3. Earlier, there were
conflicting views on
whether promoter(s) and
subsidiaries should be
included within the
definition of Group
Companies and if the
corresponding disclosure is
to be made for these
entities. However, the
ICDR 2018, specifically
excludes promoter(s) and
subsidiaries.
4. Earlier, there were

conflicting views on
whether group companies
should be determined only
on the basis of related party
transactions or to be
considered from the entire
list of group companies.
However, the ICDR 2018
specifies clearly that the
identification has to be
24
done only on the basis of
related party transactions.
5. All the entities covered in

the related party schedule
of the restated financial
statements and/or in the
audit reports and with
which there have been/ are
transactions, shall be
covered under the ambit of
group companies. This
could end up being a very
extensive list and all
entities may not be
relevant. For example, if a
company with which the
issuer had related party
transaction in the second
last year and not in the last
year, disclosure and
certificates for that entity
may become tricky.
6. Further, if any entity with

which issuer had
transactions in disclosed
related party schedule, but
now has been wound-up or
is pending strike-off or its
relationship with issuer has
been extinguished then the
lead manager on the deal
may file an exemption
application before SEBI for
excluding such company
from being disclosed in the
25
document.
7. One item that still needs to

be analyzed is the
inclusion/ exclusion of
selling shareholder from
this definition too and the
approach that needs to be
followed.
13. Definition of “Housing Housing Finance Company was not Regulation 2 (1) (u) 1. Definition of housing
Finance Company” defined under the ICDR 2009 finance company (“HFC”)
“Housing Finance Company” means a has been included in line
deposit taking housing finance company with changes in regulation
registered with the National Housing governing pledge of
Bank for carrying on the business of locked-in specified
housing finance. securities by promoters.
Please see “Pledge of
locked-in specified
securities” at serial number
46.
14. Definition of Regulations 26, 31 and 33 read with Regulation 2 (1) (v) 1. No change in inclusion of
“Infrastructure Sector” Schedule X facilities/services.
15. Definition of “Issue Regulation 2 (1) (q) Regulation 2 (1) (z) –
Size”
Defines it as offer through offer document Defines it as offer through offer
and promoters’ contribution document and promoters’ contribution
brought in as part of the issue.
16. Definition of “Issuer” Regulation 2 (1) (r) Regulation 2 (1) (aa) 1. The new definition clarifies
that a selling shareholder is
Defines it as any person making an offer Defines it as a company or a body not to be considered as an
of specified securities. corporate authorized to issue specified ‘issuer’ and that only the
securities under the relevant laws and entity whose shares are
26
whose specified securities are being being listed is to be
issued and/or offered for sale in considered as an ‘issuer’.
accordance with the ICDR 2018 and This definition has been
does not include LLPs or funds or firms amended to bring it in line
whether incorporated in or outside India. with market practice.
17. Definition of “Key Regulation 2 (1) (s) Regulation 2 (1) (bb) 1. The definition has been
managerial personnel” broadened to include:
(i) functional heads of the
It contained similar definition except it Defines it as: issuer; and
included “officer with vested executive (i) officer or personnel of the (ii) KMP as per Section 2(51)
power.” issuer who are members of the of the Companies Act.2
issuer’s core management team
(excluding board of directors) 2. Further, the persons vested
which includes members of with executive powers was
management; also a parameter for KMP
(ii) one level below the executive identification under ICDR
directors of the issuer; 2009, whereas the ICDR
(iii) functional heads and ‘key 2018, inter-alia, states that
managerial personnel’ as persons of the core
defined under the Companies management team shall be
Act; or identified as KMPs.
(iv) any other person whom the
3. One of the major changes
issuer may declare as a key
vis-à-vis KMP under the
managerial personnel;
ICDR 2018 is that
agreements entered into by
2
Section 2(51) of the Companies Act defines key managerial personnel as follows:
““key managerial personnel”, in relation to a company, means—

(i) the Chief Executive Officer or the managing director or the manager;
(ii) the company secretary;
(iii) the whole-time director;
(iv) the Chief Financial Officer;
(v) such other officer, not more than one level below the directors who is in whole-time employment, designated as key managerial personnel by the Board; and
(vi) such other officer as may be prescribed;”
27
KMP with any shareholder
or any other third party
with regard to
compensation or profit
sharing in connection with
dealings in the securities of
the issuer is categorized as
a material agreement
which would now have to
be made available for
inspection. Thus, the list of
material contracts would
be fairly lengthy now.
18. Definition of “Listed Regulation 2 (1) (t) Regulation 2 (1) (dd) –

Issuer”
Defines it as an issuer whose equity Defines it as an issuer whose equity
shares are listed on a recognised stock shares are listed on a recognised stock
exchange. exchange having nationwide trading
terminals.
19. Definition of “Net Offer” Regulation 2 (1) (u) Regulation 2 (1) (ff) 1. Under the ICDR 2009, net
offer excluded only the
Defines it as an offer of specified Defines it as an offer of specified reservations. Under the
securities to the public but does not securities to the public but does not ICDR 2018, promoters’
include reservations include reservations and promoters’ contribution brought in as
contribution brought in as part of the part of the issue is also
issue. excluded in addition to the
reservations. By
implication, such
promoters’ contribution is
also excluded from the
ambit of offer through
offer document.
20. Definition of “Net Regulation 26 Explanation Regulation 2 (1) (gg) –
28
Tangible Assets”
Defines it as the sum of all net assets of Defines it as the sum of all net assets of
the issuer, excluding intangible assets as the issuer, excluding intangible assets as
defined in Accounting Standard 26 (AS defined in Accounting Standard 26 (AS
26) issued by the Institute of Chartered 26) or Indian Accounting Standard (Ind
Accountants of India AS) 38, as applicable, issued by the
Institute of Chartered Accountants of
India.
21. Definition of “Net Regulation 2 (1) (v) Regulation 2 (1) (hh) 1. The definition is aligned
Worth” with Section 2(57) of the
It was defined as: Defines it as: Companies Act.
(i) aggregate of the paid up share capital, (i) aggregate value of the paid-up
share premium account; share capital and all reserves
(ii) reserves and surplus (excluding created out of the profits and
revaluation reserve) as reduced by the securities premium account;
aggregate of miscellaneous (ii) debit or credit balance of profit
expenditure (to the extent not and loss account, after
adjusted or written off); and deducting the aggregate value
(iii) the debit balance of the profit and of the accumulated losses,
loss account. deferred expenditure; and
(iii) miscellaneous expenditure not
written off, as per the audited
balance sheet;
But does not include reserves created

out of revaluation of assets, write-back
of depreciation and amalgamation.
22. Definition of “Offer Regulation 2 (1) (x) Regulation 2 (1) (kk) 1. Information memorandum
Document” has been deleted from the
Defines it as red herring prospectus, Defines it as red herring prospectus, definition, since the
prospectus or shelf prospectus and prospectus or shelf prospectus, as disclosure requirement has
information memorandum in terms of applicable, referred to under the now been deleted under the
29
section 60A of the Companies Act, 1956 Companies Act, in case of a public Companies Act too.
in case of a public issue and letter of offer issue, and a letter of offer in case of a
in case of a rights issue. rights issue.
23. Definition of “Offer Regulation 2 (1) (y) Regulation 2 (1) (ll) 1. Offer through offer
through Offer document excludes
Document” It contained similar definition except that Defines it as net offer and reservations. promoters’ contribution
the definition of net offer did not exclude brought in as part of the
promoter contribution. issue, consequent to
exclusion of such
promoters’ contribution in
the definition of net offer.
24. Definition of “Promoter” Regulation 2 (1) (za) Regulation 2 (1) (oo) 1. The definition has been
aligned with Section 2(69)
It was defined to include: Defines to include a person: of the Companies Act.
(i) the person or persons who are in (i) who has been named as such in
control of the issuer; a draft offer document or offer 2. Now the identification of a
(ii) the person or persons who are document or is identified by the promoter also has to be
instrumental in the formulation issuer in the annual return based on the person
of a plan or programme pursuant referred to in Section 92 of the identified in the annual
to which specified securities are Companies Act; or return filed by the
offered to public; and (ii) who has control over the affairs company.
(iii) the person or persons named in of the issuer, directly or
the offer document as promoters. indirectly whether as a 3. On the deals where annual
shareholder, director or return includes persons in
otherwise; or addition to the promoters,
(iii) in accordance with whose MGT-7 should either be
advice, directions or refiled, if possible, and the
instructions the board of issuer should clarify the
directors of the issuer is same in the resolution
accustomed to act: except passed for identification of
person acting in professional promoters.
30
capacity.
4. The requirement of
Promoter contribution does not include: identifying persons
(i) Person mentioned in Regulation instrumental in formulation
(iii) acting in professional of a plan or programme as
capacity, and Promoter has now been
removed. This is a
(ii) financial institution, scheduled welcoming change since
commercial bank, foreign the identification was a
portfolio investor other than very subjective exercise
Category III foreign portfolio and in case the person was
investor, mutual fund, venture not part of the issuer
capital fund, alternative anymore, it would render
investment fund, foreign venture this requirement aimless.
capital investor, insurance
company registered with the
Insurance Regulatory and 5. Threshold for shareholding
Development Authority of India or under second proviso has
any other category as specified by been increased from 10%
the SEBI from time to time, to 20%. Further, exemption
wherein twenty per cent. or more is extended additionally to
of the equity share capital of the VCFs, FVCIs and
issuer is held by such person insurance companies.
unless such it satisfies other However, this exemption
requirements prescribed under does not cover the
ICDR 2018. investors who have
invested under FDI route
or domestic private equity
investors.
6. The following entities,

although can now
contribute for promoters’
contribution, they are
exempted from being
identified as promoters:
i. Alternative investment
31
funds,
ii. Foreign venture capital
investors,
iii. Scheduled commercial
banks,
iv. Public financial
institutions, and
v. Insurance companies
registered with the
Insurance Regulatory and
Development Authority of
India.
25. Definition of “Promoter Regulation 2 (1) (zb) Regulation 2 (1) (pp) 1. The threshold has been
Group” increased from 10% to
20% shareholding.
It contained similar definition except that It is defined as:
the shareholding threshold which was (i) the promoter; 2. “Relative” means a relative
earlier 10% under the ICDR 2009 has (ii) an immediate relative of the as defined under the
now been increased to 20%.. promoter (i.e. any spouse of that Companies Act, 2013
person, or any parent, brother, sister which is broader than
or child of the person or of the ‘immediate relative’. For
spouse); and the purpose of Promoter
(iii) wherein promoter is a body Group identification, the
corporate, it will include: term relatives should be
read as ‘immediate
relatives’.
(a) a subsidiary or holding
company of such body
3. Insurance companies or
corporate;
entities belonging to any
(b) any body corporate in wherein other category as specified
the promoter holds 20%. or by SEBI from time to time
more of the equity share are exempt from being
capital; identified as a Promoter
(c) and/or any body corporate Group merely by virtue of
32
which holds twenty per cent. or the fact that 20% or more
more of the equity share capital of the equity share capital
of the promoter; is held by them (except
(d) any body corporate wherein a with respect to such
group of individuals or entities’ subsidiaries or
companies or combinations companies promoted by
thereof acting in concert, which them or for the mutual
hold 20%. or more of the equity funds sponsored by them).
share capital in that body They will need to satisfy
corporate and such group of the other conditions
individuals or companies or prescribed in order to meet
combinations thereof also holds the test of a promoter
twenty percent. or more of the group entity.
equity share capital of the
issuer and are also acting in 4. The definition has been
concert; and amended to increase the
(iv) in case the promoter is an shareholding requirement
individual: for the purposes of being
classified as a promoter
(a) any body corporate in which group entity.
20%. or more of the equity
share capital is held by the 5. However, insurance
promoter or an immediate companies or entities
relative of the promoter or a belonging to any other
firm or Hindu Undivided category as specified by
Family in which the promoter SEBI from time to time are
or any one or more of their exempted from being
relative is a member; identified as a Promoter
(b) any body corporate in which a Group merely by virtue of
body corporate as provided in the fact that 20% or more
(a) above holds twenty per of the equity share capital
cent. or more, of the equity is held by them (except
share capital; and with respect to such
(c) any Hindu Undivided Family entities’ subsidiaries or
or firm in which the aggregate companies promoted by
them or for the mutual
33
share of the promoter and their funds sponsored by them).
relatives is equal to or more They will need to satisfy
than twenty per cent. of the the other conditions
total capital. prescribed in order to meet
the test of a promoter
(v) all persons whose shareholding is group entity.
aggregated under the heading
"shareholding of the promoter
group" wherein financial institution,
scheduled bank, foreign portfolio
investor other than Category III
foreign portfolio investor, mutual
fund, venture capital fund,
alternative investment fund, foreign
venture capital investor, insurance
company registered with the
Insurance Regulatory and
Development Authority of India or
any other category as specified by
SEBI from time to time, shall not be
deemed to be promoter group
merely by virtue of the fact that
twenty per cent. or more of the
equity share capital of the promoter
is held by such person or entity:
Further financial institution, scheduled

bank, foreign portfolio investor other
than Category III foreign portfolio
investor, mutual fund, venture capital
fund, alternative investment fund and
foreign venture capital investor
insurance company registered with the
Insurance Regulatory and Development
Authority of India or any other category
as specified by SEBI from time to time
34
shall be treated as promoter group for
the subsidiaries or companies promoted
by them or for the mutual fund
sponsored by them.
26. Definition of “Qualified Regulation 81 (b) Regulation 2 (1) (tt) ICDR 2018 allows QIP to be
Institutions Placement” done through OFS.
Defines it as an allotment of eligible Defines it as an issue of eligible
securities by a listed issuer to qualified securities by a listed issuer to qualified
institutional buyers on private placement institutional buyers on a private
basis in terms of these regulations. placement basis and includes an offer
for sale of specified securities by the
promoters and/or promoter group on a
private placement basis, in terms of
these regulations.
27. Definition of “Scheduled Scheduled commercial bank was not Regulation 2 (1) (zz) –
commercial bank” defined under the ICDR 2009.
“scheduled commercial bank” means
scheduled commercial banks as included
in the second schedule to the Reserve
Bank of India Act, 1934.
28. Definition of “Selling Selling shareholder(s) was not defined Regulation 2 (1) (bbb) 1. Following are the
Shareholder(s)” under the ICDR 2009. confirmations which are to
Defines it as any shareholder of the be obtained from Selling
issuer who is offering for sale the Shareholders:
specified securities in a public issue in
accordance with ICDR 2018. (i) Whether they are debarred
from buying, selling or
dealing in securities under
any order or direction
passed by SEBI or any
securities market regulator
in any jurisdiction,
35
(ii) Whether they are declared
as a wilful defaulter.
(iii) Whether they are fugitive

economic offender, only in
respect to individuals.
(iv) Whether they have

committed any securities
law violation in any
jurisdiction.
(v) Whether they have

complied with the
Companies (Significant
Beneficial Ownership)
Rules, 2018
2. Earlier, under the ICDR

2009, one of the views
taken in the market was to
extend the eligibility
conditions that were
applicable to the issuer to
the selling shareholder(s).
However, pursuant to the
definition of the selling
shareholder, there are now
corresponding
confirmations, disclosures
and eligibility that are
specifically applicable to
the selling shareholder(s).
29. Definition of “securities Securities law was not defined under the Regulation 2(1)(ccc) 1. The scope and
law” ICDR 2009. interpretation of the term
36
Defines it as: “securities law” varied for
the Securities Contracts (Regulation) various confirmations that
Act, 1956, the Depositories Act, 1996, were required from various
and the rules and regulations made parties. Pursuant to the
thereunder and the general or special insertion of the definition
orders, guidelines or circulars made or under the ICDR 2018 the
issued by SEBI thereunder and the compliance with securities
provisions of the Companies Act or any law would mean to read
previous company law and any strict compliance with the
subordinate legislation framed laws that are included
thereunder, which are administered by therein.
SEBI.
2. The term “securities law”
has been referred to in the
following disclosures:
(i) Pursuant to Regulation
23(8), an issuer is now
required to appoint a
compliance officer, among
others, for monitoring the
compliance of securities
law in case of, among
others, rights issue, further
public offer;
(ii) Pursuant to Regulation
99(i) (Fast Track Issue), the
issuer, promoter, promoter
group or director of the
issuer should not have
settled any alleged
violation of securities laws
through the consent or
settlement mechanism with
SEBI during three years
immediately preceding the
reference date.
3. Further, under ICDR 2009,
37
a disclosure with respect to
the violation of the
securities laws was
required to be included
under the section “Risk
Factors”. However, the
same has been deleted
under the ICDR 2018.
30. Definition of “Stock Stock Exchange was not defined under Regulation 2 (1) (ggg) –
Exchange” the ICDR 2009.
“stock exchange” means any recognised
stock exchange having nationwide
trading terminals chosen by the issuer on
which securities of an issuer are listed or
proposed to be listed for the purpose of a
particular issue of specified securities
under these regulations, other than an
SME
Exchange.
31. Definition of “Syndicate Regulation 2 (1) (zl) Regulation 2 (1) (hhh) –

Member”
Defines it as an intermediary registered Defines it as an intermediary registered
with SEBI and who is permitted to carry with SEBI and who is permitted to
on the activity as an underwriter. accept bids, applications and place
orders with respect to the issue and carry
on the activity as an underwriter.
32. Definition of Regulation 2 (1) (zla) Regulation 2 (1) (iii) –

“Systemically important
non-banking financial Defines it as a non-banking financial Defines it as a non-banking financial
companies” company registered with the Reserve company registered with the Reserve
Bank of India and having a net-worth of Bank of India and recognised as
more than five hundred crore rupees as systemically important non-banking
per the last audited financial statements. financial company by the Reserve Bank
of India.
38
33. Definition of “Valuer” Regulation 70 Regulation 2 (1) (kkk) 1. Section 247 of the
Companies Act came into
Defines it as a person who is registered Defines it as a person who is registered force on October 18, 2017.
under section 247 of the Companies Act under section 247 of the Companies Act
and the relevant Rules framed thereunder: and the relevant rules framed thereunder
or as specified by SEBI.
Provided that till such date on which
section 247 of the Companies Act and the
relevant rules come into force, valuer
shall mean an independent merchant
banker registered with SEBI or an
independent chartered accountant in
practice having a minimum experience of
ten years
34. Definition of “Wilful Regulation 2 (1) (zn) Regulation 2 (1) (lll) –

Defaulter”
Defines it as an issuer who is categorized Defines it as a person or an issuer who
as a wilful defaulter by any bank or or which is categorized as a wilful
financial institution or consortium thereof, defaulter by any bank or financial
in accordance with the guidelines on institution (as defined under the
wilful defaulters issued by the Reserve Companies Act) or consortium thereof,
Bank of India and includes an issuer in accordance with the guidelines on
whose director or promoter is categorized wilful defaulters issued by the Reserve
as such. Bank of India.
35. Definition of “Working “working day” was not defined under the Regulation 2 (1) (mmm) 1. A distinction has been
Day” ICDR 2009. made for the days that
Defines “working day” as all days on constitute working days
which the commercial banks in the city with respect to (i) the
(as specified in the offer document) are announcement of the price
open for business. band and the issue period,
and (ii) for the period
between issue closing and
Also, for the purpose of announcement listing.
39
of price band and bid/ issue period,
working day shall exclude Saturdays, 2. For (i) above, Saturdays,
Sundays and public holidays. Sundays and public
holidays are not working
For the purpose of calculating the time days, and for (ii) above, all
period between the bid/ issue closing trading days excluding
date and the listing on the stock Sundays and bank holidays
exchanges, working day shall include all are working days.
trading days of the stock exchanges,
excluding Sundays and bank holidays,
as per circulars issued by the SEBI.
36. Applicability of the Regulation 3 Regulation 3 While the ICDR 2018 specifies
regulations the date on which the said
Contained similar provisions. However, The ICDR 2018 is applicable to (a) an regulations would be effective,
the ICDR 2009 was applicable to a rights initial public offer; (b) a rights issue it does not clarify the
issue where the aggregate value of the (where the aggregate value of the issue applicability on offer
issue is fifty lakh rupees or more. is ten crore rupees or more, from the documents to be filed in
previous threshold of fifty lakhs); (c) a relation to deals for which
further public offer; (d) a preferential DRHPs have already been
Further, the ICDR 2009 did not have any cleared by SEBI.
provisions for (a) an initial public offer by issue; (e) a qualified institutions
a small and medium enterprise, or (b) a placement; (f) an initial public offer of
listing on the institutional trading Indian depository receipts; (g) a rights
platform through an issue or without an issue of Indian depository receipts; (h)
issue. an initial public offer by small and
medium enterprise; (i) a listing on the
institutional trading platform through an
issue or without an issue; and (j) a bonus
issue.
For rights issues of less than ten crore

rupees, the issuer is required to prepare
the letter of offer in accordance with the
ICDR 2018 and file it with SEBI for
information and dissemination on
40
SEBI’s website.
Chapter II - INITIAL PUBLIC OFFER ON MAIN BOARD

37. Entities not eligible to Regulation 4 (2) (a) Regulation 5 (1) (a) 1. Debarment of selling
make an initial public shareholders from
offer accessing the capital
Contained similar provision, however, The ICDR 2018 provides that an issuer markets has now been
debarment of selling shareholders has will not be eligible to make an initial made an eligibility
now been included and debarment of public offer if the issuer, any of its condition. This change,
‘persons in control’ has now been promoters, promoter group or directors however, is consistent with
removed. or selling shareholders are debarred the market practice.
from accessing the capital markets by
SEBI. Further, the restriction does not
apply to persons or entities, which were 2. Instances of debarment
debarred in the past and the period of from accessing capital
debarment is already over as on the date market, before the date of
of filing of the draft offer document. the draft red herring
prospectus, will no longer
impact eligibility of an
issuer, provided that period
of debarment is over.
Regulation 4 (2) (b) Regulation 5 (1) (b) 1. It has been clarified that
instances of debarment
from accessing capital
The ICDR 2009 provided that an issuer The ICDR 2018 provides that an issuer market, which expired
will not be eligible to make an issue of will not be eligible to make an initial before the date of the draft
specified securities if any of the public offer if any of the promoters or red herring prospectus, will
promoters, directors or persons in control directors of the issuer is a promoter or no longer impact eligibility
of the issuer was or also is a promoter, director of any other company which is of an issuer.
director or person in control of any other debarred from accessing the capital
company which is debarred from market by SEBI. Further, the restriction
accessing the capital market. does not apply to persons or entities,
which were debarred in the past and the
period of debarment is already over as
on the date of filing of the draft offer
41
document.
There was no provision under the ICDR Regulation 5 (1) (d) 1. If any promoter or director
2009. is a fugitive economic
An issuer will not be eligible to make an offender, the issuer will not
initial public offer if any promoter or be eligible to make an
director is a fugitive economic offender. initial public offer.
2. Please see “Definition of

“Fugitive Economic
Offender”” at serial
number 10.
Regulation 26 (5) Regulation 5 (2) 1. An issuer is eligible to

undertake an initial public
offer if the existing
Contained similar provisions. Provides that an issuer is not eligible to outstanding convertible
make an initial public offer if there are securities or option to
The ICDR 2009 provided that the any outstanding convertible securities or receive equity shares are
provision are not applicable to any other right which would entitle any options granted to an
outstanding options granted to employees person with any option to receive equity employee, irrespective of
pursuant to an employee stock option shares of the issuer. whether such person is
scheme framed in accordance with the currently an employee or
relevant Guidance Note or Accounting The provision is not applicable to not, pursuant to an
Standards, issued by the Institute of outstanding options granted to employee stock option
Chartered Accountants of India. employees, whether currently an scheme in compliance with
employee or not, pursuant to an the Companies Act, the
employee stock option scheme in relevant Guidance Note or
compliance with the Companies Act, the accounting standards, if
relevant Guidance Note or accounting any, issued by the Institute
standards, if any, issued by the Institute of Chartered Accountants
of Chartered Accountants of India or of India or pursuant to the
pursuant to the Companies Act, in this Companies Act.
regard.
Accordingly, the previous
42
practice of ensuring that
options held by past
employees lapse or are
exercised before the filing
of the Draft Red Herring
Prospectus, is no longer
relevant.
2. Further, pursuant to the

new definition of
employee, this exemption
will not apply to following
persons since they are not
considered as employees:
(a) an employee who is a

promoter or a person
belonging to the
promoter group, or
(b) a director who either
himself or through his
relative or through any
body corporate,
directly or indirectly,
holds more than 10%
of the outstanding
equity shares of the
issuer.
38. Lock-in of specified Regulation 37 Regulation 17 1. Clarification has been
securities held by given that existing as well
persons other than the Contained a similar provision. However, The ICDR 2018 provides that the entire as past employees are
promoters the provision was not applicable to equity pre-issue capital held by persons other exempted from this
shares allotted to employees under an than the promoters is required to be provision.
employee stock option or employee stock locked-in for a period of one year from
purchase scheme of the issuer prior to the the date of allotment in the initial public This is significantly
initial public offer, if the issuer has made offer. different from the ICDR
43
full disclosures with respect to such 2009. Irrespective of
options or scheme in accordance with Part However, the provision is not applicable whether a person is an
A of Schedule VIII. to equity shares allotted to employees or employee of an issuer
an employee stock option trust or during the period of the
transferred to the employees by an lock-in, the exemption
employee stock option trust pursuant to from the lock-in will apply
exercise of options by the employees, as long as such a person
whether currently an employee or not, was issued equity shares
under an employee stock option or under an employee stock
employee stock purchase scheme of the option or purchase scheme
issuer prior to the initial public offer, if prior to the initial public
the issuer has made full disclosures with offer.
respect to such options or scheme in
accordance with Part A of Schedule VI. 2. Previously, while there was
no requirement under the
ICDR 2009, it was a
practice to include a
provision under the
employee stock option
scheme that upon
termination of
employment, options
granted to an employee
would either be vested or
cancelled. Therefore, under
the ICDR 2009, any person
who ceased to be an
employee was not exempt
from lock-in.
39. Eligibility requirements Regulation 26 (1) (a) Regulation 6 (1) (a) 1. The ICDR 2018 clarifies
for an initial public offer that the net tangible assets,
average operating profits,
The ICDR 2009 was silent on the manner The ICDR 2018 provides that an issuer net worth and revenue has
of calculation of net tangible assets and shall be eligible to make an initial public to be calculated on a
did not state that it needed to be offer only if it has net tangible assets of restated and consolidated
44
calculated on a restated and consolidated at least three crore rupees, calculated on basis.
basis. a restated and consolidated basis, in
each of the preceding three full years, of
which not more than fifty percent are
held in monetary assets.
Regulation 26 (1) (b) Regulation 6 (1) (b) 1. Average operating profits

to be calculated on
immediately preceding
The ICDR 2009 contained similar The ICDR 2018 provides that an issuer three years and each
provisions, however the issuer was shall be eligible to make an initial public preceding year.
eligible basis the three most profitable offer only if it has an average operating
years out of the immediately preceding profit of at least fifteen crore rupees, 2. The ICDR 2009 provided
five years. This has now been changed to calculated on a restated and consolidated an issuer the liberty to
preceding three years (of twelve months basis, during the preceding three years select the three most
each), with operating profit in each of (of twelve months each), with operating profitable years out of the
these preceding three years. profit in each of these preceding three immediately preceding five
years. years. This has now been
changed to include only
three years and such three
years should have the
required operating profit
for the issuer.
Regulation 26 (1) (d) No specific provision. 1. Condition of issue size

including the previous
The ICDR 2009 provided that an initial issues in same fiscal year
public offer can be made if the aggregate not exceeding five times
of the proposed issue and all previous the net worth has been
issues made in the same financial year in deleted.
terms of issue size does not exceed five
times its pre-issue net worth as per the
audited balance sheet of the preceding
financial year.
45
Regulation 27 Regulation 103 (1) -
The ICDR 2009 provided that an issuer Under the ICDR 2018, an issuer may
may make a further public offer if (a) the make a further public offer, if it has
aggregate of the proposed issue and all changed its name within the last one
previous issues made in the same year, at least fifty per cent. of the
financial year in terms of issue size does revenue for the preceding one full year
not exceed five times its pre-issue net has been earned by it from the activity
worth as per the audited balance sheet of indicated by its new name.
the preceding financial year; and (b) if it
has changed its name within the last one
year, at least fifty per cent. of the revenue
for the preceding one full year has been
earned by it from the activity indicated by
the new name.
Further, if the above two conditions are

not satisfied, a further public offer can be
made if the issue is made through the
book building process and the issuer
undertakes to allot, at least seventy five
per cent. of the net offer to public, to
QIBs, and to refund full subscription
money if it fails to make the said
minimum allotment to QIBs.
40. General conditions Regulation 4 Regulation 7 (c) 1. This is in line with the
Companies (Prospectus
The ICDR 2009 was silent on the In addition to the existing general and Allotment of
condition with respect to securities held conditions, the ICDR 2018 provides an Securities) Third
by the promoters in dematerialized form. additional condition with respect to the Amendment Rules, 2018
securities held by the promoters, which (notified on September 10,
shall be in dematerialized form prior to 2018), which provide that
the filing of the offer document. entire holding of securities
of, inter alia, the promoters
has to be in dematerialized
46
form.
41. Additional conditions for Regulation 26 (6) Regulation 8 1. This is a significant change
an offer for sale as previously, under the
ICDR 2009, while
Contained similar provisions, however, Provides that only such fully paid-up conversion of convertible
under the ICDR 2018, it has been equity shares may be offered for sale to instruments was allowed
clarified that full disclosures are required the public, which have been held by the till the filing of the RHP,
to be made regarding conversion or sellers for a period of at least one year conversions of convertible
exchange of fully paid-up compulsorily prior to the filing of the draft offer instruments at DRHP stage
convertible securities. document. However, in case the equity were required to the extent
shares received on conversion or of any resultant equity
exchange of fully paid-up compulsorily shares which were intended
convertible securities including to be a part of the offer for
depository receipts are being offered for sale in an IPO.
sale, the holding period of such
convertible securities, including 2. The ICDR 2018 now allow
depository receipts, as well as that of even such conversion or
resultant equity shares together is exchange (resulting in
required to be considered for the equity shares to be offered
purpose of calculation of one year in the offer for sale) to be
period. done by the time of filing
of the Red Herring
It also provides that such holding period Prospectus, subject to full
of one year is required to be complied disclosures of the terms of
with at the time of filing of the draft conversion or exchange
offer document. being made in the DRHP.
Further, the ICDR 2018 provides an

explanation that the conversion or
exchange should be completed prior to
filing of the offer document (i.e. red
herring prospectus in the case of a book
built issue and prospectus in the case of
a fixed price issue), provided full
disclosures of the terms of conversion or
exchange are made in the draft offer
47
document.
42. Minimum promoters’ Regulation 32 (1) Regulation 14 (1) 1. In addition to alternative

contribution investment funds which
was included in the ICDR
The ICDR 2009 provided that only In case the post issue shareholding of 2009, certain regulated
alternative investment funds could the promoters is less than 20%, entities such as FVCIs,
contribute towards meeting the shortfall alternative investment funds, foreign scheduled commercial
in minimum contribution as specified for venture capital investors, scheduled banks, or public financial
the promoters, subject to a maximum of commercial banks, public financial institutions or insurance
10% of the post issue capital. institutions or insurance companies companies registered with
registered with Insurance Regulatory IRDA are permitted to
and Development Authority of India contribute in order to meet
may contribute to meet the shortfall in the shortfall in minimum
minimum contribution as specified for contribution, subject to a
the promoters, subject to a maximum of limit of 10% of the post
10% of the post issue capital, without issue-capital, without being
being identified as promoter(s). classified as a promoter.
43. Securities ineligible for Regulation 33 (1) Regulation 15 (1) -

minimum promoters’
contribution Contained a similar provision, however, it The ICDR 2018 provides that, for the
did not include specific provisions for computation of minimum promoters’
ineligibility of securities acquired by contribution, the following specified
foreign venture capital investors or securities shall not be eligible:
scheduled commercial banks or public (a) specified securities acquired during
financial institutions or insurance the preceding three years, if these are:
companies registered with Insurance (i). acquired for consideration other
Regulatory and Development Authority than cash and revaluation of
of India, for the computation of minimum assets or capitalisation of
promoters’ contribution. intangible assets is involved in
such transaction; or
(ii). resulting from a bonus issue by
utilisation of revaluation reserves
or unrealised profits of the issuer
48
or from bonus issue against
equity shares which are ineligible
for minimum promoters’
contribution;
(b) specified securities acquired by the
promoters and alternative investment
funds or foreign venture capital
investors or scheduled commercial
banks or public financial institutions or
insurance companies registered with
Insurance Regulatory and Development
Authority of India, during the preceding
one year at a price lower than the price
at which specified securities are being
offered to the public in the initial public
offer.
Regulation 33 (2) Regulation 15 (2) 1. To align with the

Companies Act.
Included similar provision, however, the The specified securities referred to in
ICDR 2009 only included such securities Regulation 15(1)(a) above will be
which are acquired pursuant to a scheme eligible for computation of promoters’
which has been approved under sections contribution if such securities are
391 to 394 of the Companies Act, 1956, acquired pursuant to a scheme approved
to be eligible for computation of by:
promoters’ contribution. (a) a High Court (under sections 391 to
394 of the Companies Act, 1956);
or
(b) a tribunal; or
(c) the Central Government (under
sections 230 to 234 of the Act).
44. Face value of equity Regulation 31 (1) Deleted from ICDR 2018. 1. The face value of the
shares securities has no bearing
49
Under the ICDR 2009, an issuer making on the valuation or
an initial public offer could determine the investment decision of the
face value of the equity shares in the securities or its price per
following manner, subject to the share. After listing, there is
provisions of the Companies Act, 1956, no such requirement
the SEBI Act, and the ICDR 2009: applicable. Hence, the
(a) if the issue price per equity share was requirement has been
five hundred rupees or more, the deleted.
issuer had the option to determine the
face value at less than ten rupees per
equity share: Provided that the face
value could not be less than one
rupee per equity share; or
(b) if the issue price per equity share was
less than five hundred rupees, the
face value of the equity shares was
required to be ten rupees per equity
share.
45. Lock-in of specified Regulation 36 Regulation 16 -
securities held by the
promoters The ICDR 2009 provided for the time The ICDR 2018 additionally provides
period for which promoters contribution for the lock-in requirements for the
shares made by Promoters and AIFs are promoters contribution made by foreign
locked-in. venture capital investors or scheduled
commercial banks or public financial
Further, it defined ‘date of institutions or insurance companies
commencement of commercial registered with Insurance Regulatory
production’ as the last date of the month and Development Authority of India.
in which commercial production in a
manufacturing company is expected to Further, the term ‘date of
commence as stated in the offer commencement of commercial
document. production’ has been amended to have
its meaning specifically to a ‘project’ (as
per the definition of the ICDR 2018) in
respect of which the IPO proceeds are
proposed to be utilized as per the
50
DRHP/ offer documents
46. Pledge of locked-in Regulation 39 Regulation 21 1. Promoters’ locked-in
specified securities. shares may additionally be
pledged to SI-NBFC and
Contained similar provision, however, the The ICDR 2018 provides that the HFC. Such lenders/pledgee
ICDR 2009 did not include that securities specified securities held by the can now further invoke the
can be pledged with a systemically promoters and locked-in can be pledged pledge, however the shares
important non-banking finance company as a collateral security for a loan granted will continue to locked-in
or a housing finance company. by a scheduled commercial bank or a the hands of transferee to
Additionally, the ICDR 2009 did not public financial institution or a whom shares are
provide for continuation of the lock-in systemically important non-banking transferred by
with respect to the transferee where the finance company or a housing finance lender/pledgee on aforesaid
promoters had pledged their shares which company, subject to the following: invocation.
were locked-in and such pledge was (a) if the specified securities are
invoked. locked-in pursuant to the 2. Currently, there is an
requirement of the minimum ambiguity as to whether,
promoters’ contribution, the loan upon invocation of a
has been granted to the issuer pledge, the lock-in will be
company or its subsidiaries for the applicable to the person in
purpose of financing one or more of favour of whom the shares
the objects of the issue and the are pledged or to such
pledge of specified securities is one person to whom the shares
of the terms of sanction of the loan; are transferred by a person
or in favour of whom the
(b) if the specified securities are shares are pledged.
locked-in for a period of one year in
terms of clause (b) of regulation 16
and the pledge of specified
securities is one of the terms of
sanction of the loan.
The ICDR 2018 also provides that such

lock-in shall continue pursuant to the
invocation of the pledge and such
transferee shall not be eligible to transfer
the specified securities till the lock-in
51
period stipulated in the ICDR 2018 has
expired.
47. Filing of the draft offer Regulation 8 (2) (d) Regulation 25 (9) (d) and Regulation 1. In ICDR 2009, in relation
document and offer 123 (9) (d) to IPOs it was Independent
document The ICDR 2009 required the certificate in Chartered Accountant who
relation to the promoters contribution, The ICDR 2018 requires the certificate certifies the promoters’
which is to be submitted by the lead in relation to the promoters contribution, contribution but in ICDR
managers, to be obtained from a chartered which is to be submitted by the lead 2018 it will be certified by
accountant. managers, to be obtained from a statutory auditor.
statutory auditor.
2. Further, both for IPOs and
FPOs, the certificate shall
now have to state the
amount paid as well as
credited.
48. Draft offer document and Regulation 9 (3) Regulation 26 (2) 1. The time period for making
offer document to be a public announcement in
available to public Included a similar provision, however, the The ICDR 2018 provides that, within the newspapers has now
issuer was required to make a public two days of filing of the draft offer been increased to two days.
announcement either on the date of filing document, an issuer is required to make
the draft offer document or on the next a public announcement in newspapers
day. disclosing the fact of filing of the draft
offer document, inviting the public to
provide their comments.
49. Disclosure about the face Regulation 31 (2) Regulation 27 1. Since both the face value
value of equity shares and price band are
Included similar provision, however, the The ICDR 2018 provide that the disclosed through the
ICDR 2009 also provided for inclusion of disclosure about the face value of equity advertisement, disclosure
a statement about the issue price being shares is required to be made in the draft of this sentence is deleted.
‘X’ times of the face value. offer document, offer document, However, requirement of
advertisements and application forms, disclosure of face value
along with the price band or the issue along with price is being
Additionally, the provision related to the retained in the
52
manner in which the issuer could price in identical font size. advertisement.
determine the face value of equity shares
based on the issue price has been deleted.
50. Price and price band Regulation 30 (2) Regulation 29 (4) 1. This change entails that the
issuer now has a reduced
Required the issuer to announce the floor 1. The floor price or the price band is time frame for announcing
price or price band five working days now required to be announced two the price band from five
before the opening of the bid (in case of working days before the opening of the working days to two
an initial public offer) and at least one issue. working days prior to the
working day before the opening of the bid opening of the issue, giving
2. Further, it can be done in the same the issuer more flexibility
(in case of a further public offer), in all newspapers in which the pre-issue
the newspapers in which the pre-issue to fix the price band.
advertisement was released or together
advertisement was released. with the pre-issue advertisement in the
format prescribed under the ICDR 2018. 2. Further, the ICDR 2018
now allows the issuer to
make this announcement
along with the pre-issue
advertisement, which is
issued after registering the
red herring prospectus (for
book built issues) or
prospectus (for fixed
issues).
51. Underwriting Regulation 13 (8) Regulation 40 1. Underwriting can now be

done only to the extent of
The underwriting obligation to the extent The requirement for underwriting to the minimum subscription for
of entire hundred per cent of the offer extent of minimum subscription, which pure fresh issue and to the
through offer document in case hundred is at least ninety per cent of the offer extent of meeting the
per cent of the offer was underwritten, is through the offer document, except in public float requirements,
deleted. case of an offer for sale of specified i.e., 10% or 25%. Thus,
securities is retained. underwriters do not need to
underwrite the entire offer
and can limit their
53
obligation to the extent of
minimum subscription.
52. Reservation on Regulation 42 Regulation 33 1. Unlike the ICDR 2009,
competitive basis now employee refers
The provision was similar, except that the The issuer is now required to make employee of “promoter”
issuer could also make a reservation on reservations on a competitive basis out and not “holding
competitive basis in favour of the of the issue size excluding promoters’ company”.
following categories of persons: contribution in favour of the following
shareholders (other than promoters) of: categories of persons: 2. Further, for the purposes
listed group companies, in case of an a) employees; of reservation,
existing issuer. b) shareholders (other than promoters (i) shareholders of listed
and promoter group) of listed group companies, and
subsidiaries or listed promoter persons associated with the
companies. issuer or depositors,
bondholders or subscribers
to the services with the
issuer, have been
excluded, and (ii) the
shareholders of listed
subsidiaries have been
included.
3. Additionally, the
competitive reservation
under the ICDR 2018 does
not exclude net offer and
distinguish between new
issuer and old issuer.
53. Public advertisement Regulation 60 Regulation 42 (read with Schedule IX) -
The provisions to be complied are the All public communication, publicity

same, except that currently, it is covered materials, advertisements and research
in a separate schedule. reports shall comply with the provisions
of Schedule IX.
54
54. Minimum subscription Regulation 14 (2) Regulation 45 (2) 1. This change has been
made to align the period of
refund in case of non-
In the event of non-receipt of minimum In the event of non-receipt of minimum receipt of minimum
subscription, all application monies subscription, all application monies subscription with Rule 11
received were required to be refunded to received are now required to be of the Companies
the applicants, but not later than: refunded to the applicants not later than (Prospectus and Allotment
(a) fifteen days of the closure of the issue, fifteen days from the closure of the of Securities) Rules, 2014
in case of a non-underwritten issue; and issue. without distinguishing
(b) seventy days of the closure of the between underwritten and
issue, in the case of an underwritten issue non-underwritten issues
where minimum subscription including and uniformly provides for
devolvement obligations paid by the 15 days for any public
underwriters not received within sixty issue.
days of the closure of the issue.
55. Period of subscription Regulation 46 Regulation 46 1. Taking into consideration

that the period of
subscription may be
(1) The requirement was the same, except (1) An initial public offer is now required to be extended due
that the computation of ten days included required to be kept open for at least to other factors such as force
the days for which the issue is kept open three working days and not more than majeure, banking strike,
in case of revision in price band. ten working days. bandh, etc. Accordingly, the
(2) The requirement is the same, except (2) In case of a revision in the price same is added as one of the
that a proviso that the total bidding period band, the issuer shall extend the bidding reasons under Regulation
shall not exceed ten working days, (issue) period disclosed in the red 46(3) for extension of period
existed. herring prospectus, for a minimum of subscription irrespective
period of three working days, subject to of change in price band.
the above.
(3) In case of force majeure, banking
strike or similar circumstances, the
issuer may, for reasons to be recorded in
writing, extend the bidding (issue)
period disclosed in the red herring
prospectus (in case of a book built issue)
or the issue period disclosed in the
55
prospectus (in case of a fixed price
issue), for a minimum period of three
working days, subject to the provisions
of sub-regulation (1).
56. Application and This provision was not included in the Regulation 47 (1) -
minimum application ICDR 2009.
value The maximum application by non –
institutional investor cannot exceed the
total number of securities offered in the
issue less the securities offered to
qualified institutional buyers.
57. Oversubscription Regulation 15 Regulation 49 (2) 1. The provision for making

oversubscription is reduced
in the ICDR 2018 from
Provided a similar flexibility, except that The issuer is not allowed to make any 10% to 1% of the net offer
the upper limit was fixed at ten per cent of allotment in excess of the specified to the public only for the
the net offer. securities offered through the offer purpose of making
document except in case of allotment in minimum lots.
oversubscription for the purpose of
rounding off to make allotment, in 2. The ICDR 2018 now
consultation with the designated stock necessitates an additional
exchange. In case of oversubscription, involvement of the stock
an allotment of not more than one per exchanges by providing for
cent of the net offer to public may be a consultation with them
made for the purpose of making for the said
allotment in minimum lots. oversubscription.
58. Allotment, refund and Regulation 18 (2) Regulation 50 (3) -
payment of interest
The ICDR 2009 required the issuer to pay The ICDR 2018 requires the issuer to
the issuer interest at such rate as specified pay an interest at the rate of fifteen per
in the offer document. cent per annum where the specified
securities are not allotted and/or
56
application monies are not refunded or
unblocked within the prescribed time.
59. Responsibility(ies) of Regulation 64 (4) Regulation 52 (1) 1. The position is the same
Lead Merchant and consistent with the
market practices. It is
Banker(s) The responsibility of the lead merchant The responsibility of the lead more clarificatory under
banker was required to continue even manager(s) will continue until the ICDR 2018. Adequate
after the completion of issue process. completion of the issue process and for carve outs in the draft red
any issue related matter thereafter. herring prospectus / offer
document and offer
agreement should be
included.
60. Restriction on further Regulation 19 Regulation 56 1. The ICDR 2018 now
capital issues The requirement was the same, except An issuer is not allowed to make any requires disclosure of
that it included a carve out for a fast track further issue of specified securities in either the total number of
issue and other issues. A fast track issue, any manner, except pursuant to an specified securities or the
during the period between the date of employee stock option scheme, between amount proposed to be
registering the red herring prospectus (in the date of filing the draft offer raised in the pre-IPO
case of a book built issue) or prospectus document and the listing of the specified placement, which avoids
(in case of a fixed price issue) with the securities offered, unless full disclosures the disclosure of valuation
Registrar of Companies or filing the letter regarding the total number of specified at draft red herring
of offer with the designated stock securities or amount proposed to be prospectus stage.
exchange and the listing of the specified raised are made. 2. The ICDR 2018 has carved
securities offered through the offer out issues made pursuant to
document or refund of application an employee stock option
monies. scheme from the restriction
on further issues between
the date of filing the draft
offer document and listing
of the specified securities
offered through the offer
document or refund of
application monies.
3. Also, the ICDR 2018 has
moved the carve out for
57
fast track issues and other
issues under the relevant
chapters of the ICDR 2018.
3. Reference date - Regulation 60 1. The ICDR 2018 has

clarified that the issuer is
An issuer offering specified securities of required to comply with
aggregate value of ten crore rupees or the conditions in Chapter
more through a rights issue is required III at both stages at the
to satisfy the conditions of Chapter III at time of offering specified
the time of filing the draft letter of offer securities of an aggregate
with SEBI and also at the time of filing value of ten crore rupees or
the final letter of offer with the stock more through a rights
exchanges, as the case may be. issue, i.e., at the time of
filing the draft letter of
offer with SEBI and also at
the time of filing the final
letter of offer with the
stock exchanges as
compared to the ICDR
2009, which did not
specify the said
58
requirement for rights
issue.
61. Rights Issue – Record Regulation 52 (1) Regulation 68 (1) 1. The requirement of
Date opening a rights issue for
subscription for a
The requirement was the same, except The issuer is required to announce a minimum period of ten
that the same did not align with the record date for the purpose of days has been aligned with
Securities and Exchange Board of India determining the shareholders eligible to the Securities and
(Listing Obligations and Disclosure apply for specified securities in the Exchange Board of India
Requirements) Regulations, 2015. proposed rights issue for such period as (Listing Obligations and
may be specified in the Securities and Disclosure Requirements)
Exchange Board of India (Listing Regulations, 2015 in the
Obligations and Disclosure ICDR 2018.
Requirements) Regulations, 2015.
62. Rights Issue – Regulation 13 (1) Regulation 81 (1) 1. The ICDR 2018 has
Underwriting clarified that a rights issue
can be underwritten only to
The requirement is the same, except that If the issuer entails to have the issue the extent of entitlement of
the condition for the issue to be underwritten, it is required to appoint public shareholders and not
underwritten only to the extent of underwriters in accordance with the for the entitlement of the
entitlement of shareholders other than the Securities and Exchange Board of India promoters and promoter
promoters and promoter group was not (Underwriters) Regulations, 1993, group, which is consistent
included. provided that the issue can be with market practice.
underwritten only to the extent of
entitlement of shareholders other than
the promoters and promoter group.
63. Rights Issue – Fast Track Regulation 6 (1) Regulation 71 (1) 1. The ICDR 2018 has now
Issue clarified that filing of draft
letter of offer with SEBI is
The issuer was required to file a draft Prior to making a rights issue, the issuer, not required in case of a
letter of offer with SEBI, irrespective if except in case of a fast track issue, is fast track rights issue,
the rights issue was a fast track issue or required to file a draft letter of offer, although the fee will still
not, along with fees as specified in with the concerned regional office of the be required to be paid to
59
Schedule IV. Board under the jurisdiction of which the stock exchanges. The
the registered office of the issuer requirement for filing a due
company is located, in accordance with diligence checklist or cover
Schedule IV, along with fees as letter along with the filing
specified in Schedule III, with the Board fees is still being discussed.
and with the stock exchange(s), through
the lead manager(s).
64. Rights Issue – ASBA Regulation 58 (5) Regulation 76 1. It is clarified in the ICDR
2018 that applicants in a
rights issue are required to
The regulation was the same, except that The issuer is required to provide the make applications only
it included an additional provision for ASBA facility in the manner specified through ASBA facility, if
qualified institutional buyers and non- by the Board where not more than one they are holding equity
institutional investors who could submit payment option is provided, provided shares in dematerialized
their bids applications using the ASBA that the applicants in a rights issue shall mode, have not renounced
facility only and the Retail individual be eligible to make applications through entitlement in part or in full
investors could either apply through ASBA facility only if such applicant: and are not renouncees.
ASBA facility or make payment through (i) is holding equity shares in
cheque or demand draft. dematerialised mode; (ii) has not 2. Further, as per the ICDR
renounced entitlement in part or in full; 2018, payment for
and (iii) is not a renouncee. Further, application for any
payment for application for any reserved reserved portion outside the
portion outside the issue period can be issue period can be through
through electronic banking modes. electronic banking mode as
compared to ICDR 2009
wherein the retail
individual investors could
either apply through ASBA
facility or make payment
through cheque or demand
draft.
65. Rights Issue – Fast Track Regulation 10 (1)(f) Regulation 99 (m) 1. Under the ICDR 2018, a
Issue – Eligibility company to be eligible to
conditions make a fast track rights
The issuer was eligible to undertake a fast The provisions of “Filing of offer
60
track issue if the impact of auditors’ document”, “Security Deposit” and issue should not have any
qualifications on the audited accounts of “Documents to be submitted before audit qualifications, as
the issuer in respect of those financial opening of the issue” will not be compared to the ICDR
years for which such accounts wee applicable to a public issue or rights 2009 wherein such audit
disclosed in the offer document did not issue if the issuer satisfies the following qualifications were allowed
exceed five per cent of the net profit or condition: if they did not exceed 5%
loss after tax of the issuer for the of the net profit or loss
respective years. There are no audit qualifications on the after tax of the issuer for
audited accounts of the issuer in respect the respective financial
of those financial years for which such years.
accounts are disclosed in the letter of
offer.
66. Eligibility for qualified Regulation 82 Regulation 172 1. The ICDR 2018 removes
institutions placement the requirement of
The only eligibility criterion for A listed issuer is eligible to make a passing a special
undertaking a qualified institutions qualified institutions placement of resolution in case QIP is
placement was that a special resolution eligible securities if it satisfies the through an offer for sale
approving the same be passed by its following conditions: by promoters or promoter
shareholders, wherein it would specify group for compliance
a) a special resolution approving the with minimum public
that the allotment is proposed to be made qualified institutions placement has been
through qualified institutions placement. shareholding
passed by its shareholders, however the requirements.
same would not be required in case the
qualified institutions placement is
through an offer for sale by promoters or 2. Further, an additional
promoter group for compliance with eligibility criterion has
minimum public shareholding been included that none
requirements specified in the Securities of the promoters or
Contracts (Regulation) Rules, 1957; directors of the issuer is a
fugitive economic
offender.
b) The said allotment will have to be
completed within a period of 365 days
from the date of passing of the
resolution.
61
c) An issuer shall be eligible to make a

qualified institutions placement if any of
its promoters or directors is not a
fugitive economic offender.
67. Conditions for offer for - Regulation 173 1. Offer for sale by promoters
sale by promoters for and members of promoter
compliance with The promoters and members of the group for compliance with
minimum public promoter group may make an offer for minimum public
shareholding sale of fully paid up equity shares, shareholding requirements
requirements specified in through a qualified institutions has been added in the
the Securities Contracts placement, for the purpose of achieving ICDR 2018.
(Regulation) Rules, 1957 minimum public shareholding in terms
of the Securities Contracts (Regulation)
Rules, 1957, subject to the terms and
conditions specified therein.
68. Appointment of - Regulation 174 1. The ICDR 2018 aligns

merchant banker Regulation 21A of the
Securities and Exchange
It is now required that at least one lead Board of India (Merchant
manager to the issue will not be an Bankers) Regulations, 1992
associate (as defined under the by adding this additional
Securities and Exchange Board of India provision of at least one
(Merchant Bankers) Regulations, 1992) lead manager not being an
of the issuer and in case it is, the same associate of the issuer.
shall be disclosed and its role shall be
limited to marketing of the issue.
69. Placement Document Regulation 84 Regulation 174 1. The ICDR 2018 has
combined Regulations
There was ambiguity as regards the said The lead manager(s), while seeking in- 83(2) and 84(3) of the
obligation under Regulations 83(2) and principle listing approval for the eligible ICDR 2009 and clarified
that the responsibility is
62
84(3) of the ICDR 2009. securities, is required to furnish to each on the lead manager(s).
stock exchange on which the same class The lead manager(s) may
of equity shares of the issuer are listed, a now require back-to-back
due diligence certificate, and also letters and the said
furnish a copy of the preliminary change will be required to
placement document along with any be addressed in the cover
other document required by the stock letter and the auditor
exchange. certificates.
70. Due diligence Regulation 83(1) Regulation 175(1) -
A qualified institutions placement shall be The lead managers to a qualified

managed by merchant banks registered institutions placement shall exercise due
with SEBI who shall exercise due diligence and shall satisfy themselves
diligence. with all aspects of the qualified
institutions placement including the
veracity and adequacy of disclosures in
the offer document.
71. Pricing – Regulation 176(1) 1. This is in line with the

exemption from obtaining
No shareholders’ approval will be shareholders’ approval for
required in case of a qualified qualified institutions
institutions placement made through an placements through offer
offer for sale by promoters for for sale by promoters /
compliance with minimum public promoter group to meet
shareholding requirements specified in minimum public
the Securities Contracts (Regulation) shareholding requirements.
Rules, 1957.
72. Application and Regulation 86 Regulation 179 1. An additional restriction on
Allotment downward revision of bids
has been inserted in the
The restriction of downward revision was The applicants in qualified institutions ICDR 2018.
not included. placement are not allowed to withdraw
or revise downwards their bids after the
closure of the issue.
63
73. Qualified institutions Regulation 89 No specific provision 1. Companies suffer losses for
placement - Restrictions a variety of reasons
on amount raised including slowdown in
The aggregate of the proposed qualified their sectors, which leads to
institutions placement and all previous erosion of their net worth.
qualified institutions placements made by These companies, in the
the issuer in the same financial year could process of turning around,
not exceed five times the net worth of the are unable to raise funds
issuer as per the audited balance sheet of through qualified
the previous financial year. institutions placement as
their pre-QIP net worth will
be small or negative. As
such, these companies have
to look for other avenues
for fund raising which may
be time consuming and
expensive options.
Qualified institutional
buyer investors are in a
better position to evaluate
such opportunities and
qualified institutional
buyers also are not required
to be given any protection.
The said requirement is
deleted in the ICDR 2018.
74. Qualified institutions Regulation 87 (2) Regulation 180 (2) 1. Given that the Companies
placement - Minimum Act does not have
number of allottees corresponding provisions
The term ‘same group’ was not defined. The term ‘same group’ is defined in the for Section 372 of the
explanation. Companies Act, 1956, the
definition of ‘same group’
has been added to bring
more clarity.
64
75. Qualified institutions Schedule XVIII (12) Schedule VII Clause (11) 1. The ICDR 2018 have
placement - Financial added that the latest
Statements The audited consolidated and standalone reviewed financials
financial statements are required to be The audited consolidated and standalone disclosed to the stock
disclosed. financial statements for last three exchanges have to be
financial years are required to be disclosed as well and has
disclosed. In addition, the latest specified that the audited
reviewed financials disclosed to the consolidated and
stock exchanges have to be disclosed as standalone financial
well. statements are required to
be disclosed for a period of
three years.
76. Qualified institutions Schedule XVIII (19) Schedule VII Clause (19) 1. SEBI has clarified that
placement - Legal legal proceedings are
proceedings Legal proceedings required to be disclosed in
Legal proceedings to be disclosed in accordance with the
accordance with the materiality policy materiality policy
framed under the Securities and determined by the
Exchange Board of India (Listing Company.
Obligations and Disclosure
Requirements) Regulations, 2015.
77. Institutional Placement CHAPTER VIII-A: INSTITUTIONAL No specific provision -

Programme PLACEMENT PROGRAMME
Schedule
78. Formats of Due The ICDR 2009 required five due The ICDR 2018 requires submission of 1. Since, the time gap
Diligence Certificates diligence certificates to be submitted by three due diligence certificates at the between filing of RHP,
the lead managers to SEBI in a period of following stages: opening and closing of
15-20 days at the following stages: issue is too small, only if
(i) Filing of the DRHP; there is any material
(i) Filing of the DRHP; (ii) Registration of the offer document; update during this period,
(ii) Issue opening; and then only fresh due
65
(iii) Issue closing; (iii) Post-issue. diligence certificate is
(iv) Filing of the prospectus; and required.
(v) Post-issue. In the event there is any significant 2. In terms of the ICDR 2009,
material development between the filing five due diligence
Accordingly, the requirement of of the offer document and the allotment certificates were required
submission of certificates at issue opening of securities, an additional due diligence to be submitted at the time
and issue closing stages have been deleted certificate is required to be submitted. of a) filing of the DRHP,
in the ICDR 2018. b) issue opening and c)
issue closing, d) filing of
the prospectus and e) post-
issue.
3. However, under the ICDR
2018, only three due
diligence certificates are
required to be submitted at
the a) filing of the DRHP,
b) registration of the offer
document; and c) post
issue stages.
4. Further, in the event there
is any significant material
development between the
filing of the offer
document and the
allotment of securities, an
additional due diligence
certificate is required to be
submitted.
79. FORM A - Format of The ICDR 2009 required an enclosure of The requirement for the statement on 1. This requirement has been
due diligence certificate a statement on price information of past price information of past issues handled deleted in order to avoid
to be given by the lead issues handled by merchant bankers by the merchant bankers as part of the duplication of submission
manager(s) along with responsible for the issue to be included in due diligence certificate to be submitted required in view of the
draft offer document or the due diligence certificate to be at the draft offer document stage has same being already
draft letter of offer submitted by the merchant bankers been deleted under the ICDR 2018. disclosed in the draft offer
alongwith the draft offer document. document under Other
Regulatory and Statutory
66
Disclosures.
80. The ICDR 2009 required a certification The ICDR 2018 requires the lead 1. The requirement to obtain
stating that the profits from related party managers to include the certification in a certificate has been
transactions have arisen from legitimate relation to related party transactions to deleted in view of the
business transactions of the issuer. form part of the note explaining the due following:
diligence process exercised by the lead
managers. The note is required to state (i) each RPT need not
that the related party transactions for the result into profits for
period disclosed in the offer document the company; and
have been entered into by the issuer in (ii) detailed disclosures
accordance with applicable law. on RPTs are already
made in the offer
document in the
financial statements
of the company;
additional disclosures
on related parties are
included in the offer
document as they are
considered group
companies.
Schedule VIII - DISCLOSURES IN Schedule VI - DISCLOSURES IN

OFFER DOCUMENT, ABRIDGED THE OFFER DOCUMENT,
PROSPECTUS AND ABRIDGED ABRIDGED PROSPECTUS AND
LETTER OF OFFER ABRIDGED LETTER OF OFFER
81. Risk factors Clause IV (H) (1) - -
The ICDR 2009 required a disclosure of

any criminal charges under the Indian
penal Code and violation of securities
law, which has now been deleted.
82. Clause IV (H) (6) - -
67
The ICDR 2009 required a disclosure of

in case the industry segment for which the
issue is proposed has contributed to less
than twenty five percent of the revenues
of the issuer in the previous three fiscals,
which has now been deleted.
83. Clause IV (H) (2) Clause 5 (G) (1) The ICDR 2009 required
disclosure of risk relating to all
The ICDR 2009 required disclosure of Material statutory clearances and statutory clearances and
risk relating to all statutory clearances and approval that are yet to be received by approval that are yet to be
approval that are yet to be received by the the issuer; received by the issuer. This has
issuer. This has now been amended to now been amended to include
include only the material statutory only the material statutory
clearances and approvals. clearances and approvals. This
change is consistent with the
section ‘Government
Approvals’, where the
disclosures are provided for
material approvals.
84. Clause IV (H) (19) Clause 5 (G) (6) The ICDR 2018 now requires
the risk relating to lack of
The ICDR 2009 required the risk relating Lack of significant experience of the experience for the issuer as
to lack of experience to be disclosed only issuer or its promoters in the industry well.
in relation to the promoters of the issuer. segment for which the issue is being
made.
85. - Clause 5 (G) (7) -
If the issuer has incurred losses in the

last three financial years.
86. Clause IV (H) (8) Clause 5 (G) (9) This risk factor is now limited
to the issuer, its subsidiaries
Similar provision under the ICDR 2009, Refusal of listing of any securities of the and group companies, and does
68
however this has now been limited to a issuer or any of its subsidiaries or group not cover associates now.
period of ten years and only to the issuer, companies during last ten years by any
its subsidiaries and group companies of the stock exchanges in India or Further, disclosure of historical
under the ICDR 2018. abroad. refusal of listing has been done
away with and now refusal of
listing in last 10 years is
required to be disclosed.
87. Clause IV (H) (12) Clause 5 (G) (13) Under ICDR 2018, this risk
factor covers only (i) the issuer;
Similar provision under the ICDR 2009, Unsecured loans, if any, taken by the and (ii) its subsidiaries. ICDR
however this has now been limited to issuer and its subsidiaries that can be 2009 required additional
issuer and its subsidiaries under the ICDR recalled at any time. coverage of promoter, group
2018. The disclosure for such risk for companies and associates.
promoter, group companies and
associated has now been deleted.
88. Clause IV (H) (13) Clause 5 (G) (13) The scope of the risk factor has
been clarified.
Similar provision under the ICDR 2009, Default in repayment of deposits or
however this has now been clarified to be payment of interest thereon by the issuer
included only for the issuer and its and subsidiaries, and the roll over of
subsidiaries under the ICDR 2018. liability, if any.
89. Clause IV (H) (15) Clause (5) (G) (16) & (17) 1. A ten year time frame (for
listed issuer or listed
The ICDR 2009 did not prescribe any The risk factor relating to the shortfall in subsidiaries) or five years
specific time period of the risk factor performance vis-à-vis the objects stated (for listed subsidiaries or
relating to the shortfall in performance in any of the issues made by for the listed promoters) for
vis-à-vis the objects stated in any of the listed issuer or listed subsidiaries for ten disclosure of information
previous issues, quantifying such years and any of the listed promoters or relating to previous issues
shortfalls or delays. Such risk was listed subsidiaries for five years, which have been
required to be disclosed for the previous quantifying such shortfalls or delays. undertaken has been set
issues of the issuer and group companies. bearing in mind that the
[AZB: Clause (5) (G) (16) sets out that information beyond that
such risk is required to be disclosed for period might not be
the past ten years for the listed relevant to the prospective
69
subsidiary and Clause (5) (G) (17) sets investors.
out that such risk is required to be 2. Further, group companies
disclosed for the past five years. Thus have been excluded from
there is a discrepancy in the regulations the ambit of the risk factor
which needs to be clarified.] and its now limited to
listed subsidiaries, listed
promoters and listed issuer
only.
3. The risk factor does not
cover group companies
now but limited to listed
issuer, listed subsidiaries
and listed promoter(s).
4. The risk factor specifies a
time period for analysis
and disclosure of any
shortfall in performance
vis-à-vis objects, i.e. 10
years in case of listed
issuers and five years in
case of listed subsidiaries
or listed promoter(s).
Notably, the time period

prescribed under the
section “Other Regulatory
and Statutory Disclosures”
is not aligned with the risk
factor. In the back section,
following disclosure
requirement is prescribed:
(a) all issues by issuer in

last five years; and
(b) last one issue by listed
subsidiaries and listed
promoters in last five
70
years.
90. Clause IV (H) (16) Clause (5) (G) (19) -
Similar provision under the ICDR 2009, Any portion of the issue proceeds that is
however this has now been limited to proposed to be paid by the issuer to the
promoter, directors or key managerial promoter, directors or key managerial
personnel of the issuer under the ICDR personnel of the issuer.
2018. The disclosure for such risk for
promoter, directors or key managerial
personnel of the group companies has
now been deleted.
91. Clause (IV)(H)(24) Clause (5)(G)(24) 1. Disclosures pertaining to

litigation under risk factor
A summary of the outstanding litigations, Summary of all outstanding litigations are consolidated and
disputes, non-payment of statutory dues, and other matters disclosed in the aligned with the Litigation
overdues to banks or financial section titled ‘Outstanding Litigations chapter under Schedule VI
institutions, defaults against banks or and Material Developments’ in a tabular of ICDR 2018.
financial institutions, contingent liabilities format along with amount involved, 2. Certain line items were
not provided for, the details of where quantifiable. Issuer shall also deleted from Litigation
proceedings initiated for economic separately highlight any criminal, chapter vide SEBI (Issue
offences or civil offences (including the regulatory or taxation matters which of Capital and Disclosure
past cases, if found guilty), any may have any material adverse effect on Requirements) (Fourth
disciplinary action taken by the SEBI or the issuer. Amendment) Regulations,
recognized stock exchanges, etc., 2015. However,
pertaining to the issuer, promoter and corresponding changes
wholetime directors of the issuer and were not made under Risk
group companies, along with the nature of Factors under Schedule
the litigation, quantum of funds involved, VIII of ICDR 2009.
with a cross reference to the page where 3. The ICDR 2009 required a
the detailed disclosures have been made disclosure of any criminal
in the offer document. If any the above- charges under the Indian
mentioned litigations, etc., arise after the penal Code and violation
filing the draft offer document, the facts of securities law, which
shall be incorporated appropriately in the has now been deleted.
offer document. 4. The ICDR 2009 required a
71
disclosure of any criminal
Clause (IV)(H)(31) charges under the Indian
penal Code and violation
All disputed or contested tax demands of securities law, which
and other government claims, along with has now been deleted.
the disclosures of amount, period for 5. Further, under the ICDR
which such demands or claims are 2018, any criminal,
outstanding, financial implications and regulatory or taxation
the status of the case. matter which may have
any material adverse effect
on the issuer are required
to be separately disclosed.
92. Clause IV (H) (27) Clause (5) (G) (27) 1. Risk factor on negative
cash flow has been
Similar provision under the ICDR 2009, Negative cash flow from operating restricted to operating
however this has now been limited to a activities in the last three financial activities for last three
period of three financial years under the years. years.
ICDR 2018.
93. Clause IV (H) (28) Clause (5) (G) (28) 1. Land proposed to be
acquired from issue
The ICDR 2009 required this disclosure If the land proposed to be acquired from proceeds will not be
to be made in relation to any land which proceeds of the issue is not registered in registered in the name of
is not registered in the name of the issuer. the name of the issuer. the issuer till completion of
transaction. Thus, this risk
[AZB: The intent of the amended risk factor may be required to
factor is not clear as any land which is be disclosed in every such
proposed to be acquired will not be case.
registered in the name of the issuer as of 2. Earlier, all other properties
the date of the document] which were not material
for business or operation
were required to be
disclosed under risk
factors, if not owned by the
issuer and are taken on
lease. Now the scope of the
72
risk factor has been
restricted to properties
proposed to be acquired
from issue proceeds.
94. Clause IV (H)(29) The risk factor has been deleted. -
The ICDR 2009 required a risk factor in

relation to the lack of arrangement in
terms of borrowings or working capital
requirements from banks or financial
institutions to be disclosed.
95. Clause IV (H) (32) Clause (5) (G) (30) It has been clarified that such
disclosure is to be made only
Similar provision under the ICDR 2009, Existence of a large number of pending for the issuer, listed
however, it has been clarified that such investor grievances against the issuer, subsidiaries and top 5 listed
disclosure is to be made only for the listed subsidiaries and top 5 listed group group companies by market
issuer, listed subsidiaries and top 5 listed companies by market capitalisation. capitalization.
group companies by market
capitalization. The ICDR 2009 required
this to be disclosed for the issuer and
other listed companies under the same
management within the meaning of
section 370 (1B) of the Companies Act,
1956.
96. Offer Document Clause (V) Clause (4) 1. The new section "Offer
Summary Document summary"
The section on “Prominent Notes” has The section “Prominent Notes” has been provides a summary of
been deleted. However, similar deleted and a new section, “Offer the important information
disclosures have been covered under Document Summary”, has been included for investors to take an
various sections of the ICDR 2018 which in the ICDR 2018 which requires the informed decision.
are stated below: issuer to set out a summary of the 2. The ICDR 2009 required
following, additional information, as the networth to be
a. Net worth for the past three years (as applicable: disclosed before the issue
per the restated consolidated and issue size as per the
73
financial statements) and stub period 1. Primary business of the issuer and audited financial
is required to be disclosed under the industry in which it operates, in statements. This has now
“Offer document summary”. not more than 100 words each; been broadened to
b. Cost of acquisition of share for include networth for past
promoter and selling shareholder. 2. Names of the promoters; three years and the stub
c. Business interest of group period.
companies in the issuer and the 3. Size of the issue disclosing 3. The ICDR 2009 required
amount of commercial business that separately size of the fresh issue the cost per share to
the said company has or proposed to and offer for sale; promoters and book value
have with the issuer is required to be to be disclosed. This has
disclosed under “Information with 4. Objects of the issue in a tabular now been limited to the
respect to group companies”. format; average cost of
d. Summary of related party acquisition. Further, this
transactions for last three years and 5. Aggregate pre-issue shareholding disclosure is now
cross-reference to related party of the promoter and promoter required to be given for
transactions as disclosed in the group, selling shareholder(s) as a the selling shareholder as
restated financial statements is percentage of the paid-up share well.
required to be disclosed under capital of the issuer; 4. The ICDR 2009 required
“Offer document summary”.; that the related party
e. Details of change in name are 6. Following details as per the transactions with group
required to be disclosed in the offer restated consolidated financial companies and
document and a cross reference to statements for past 3 years and subsidiaries to be
the same is required to be disclosed stub period in tabular format: disclosed for the last year.
on the cover page. This has now been
f. Disclosure pertaining to financing a. Share capital; extended to include all
arrangements for purchase of b. Net worth; related party transactions
securities of the issuer for the period c. Revenue; for the last three years.
of six months immediately d. Profit after tax; 5. The ICDR 2009 required
preceding the date of the draft offer e. Earnings per share; a separate disclosure for
document/ offer document is f. Net asset value per equity share; change in name of the
required to be disclosed under “offer and issuer, the reason for such
document summary”. g. Total borrowings (as per balance change alongwith any
sheet). corresponding changes to
The following disclosure from prominent the objects clause of the
notes has been deleted: 7. Auditor qualifications which have memorandum of
not been given effect to in the association to be included
Disclosure to the effect that the investors restated financial statements. under prominent notes.
74
may contact any of the merchant bankers This has deleted as the
who have submitted the due diligence 8. Summary table of outstanding same is already included
certificate to the Board, for any complaint litigations and a cross-reference to under “History and
pertaining to the issue". the section titled ‘Outstanding corporate structure of the
Litigations and Material issuer”.
Developments’. 6. Sub-section “Prominent
Notes” deleted and a new
9. Cross-reference to the section section giving a summary
titled ‘Risk Factors’. of the offer document has
been added.
10. Summary table of contingent 7. Disclosure of cost of
liabilities and a cross-reference to acquisition for selling
contingent liabilities of the shareholders is
issuer as disclosed in restated mandatory now.
financial statements. 8. Now, in addition to the
cost of acquisition,
11. Summary of related party weighted average price at
transactions for last 3 years and which specified security
cross-reference to related party was acquired by each of
transactions as disclosed in the promoters and selling
restated financial statements. shareholders in the last
one year is also required
12. Details of all financing to be disclosed.
arrangements whereby the
promoters, members of the
promoter group, the directors of
the company which is a promoter
of the issuer, the directors of the
issuer and their relatives have
financed the purchase by any other
person of securities of the issuer
other than in the normal course of
the business of the financing entity
during the period of six months
immediately preceding the date of
the draft offer document/offer
document.
75
13. Weighted average price at which

specified security was acquired by
each of the promoters and selling
shareholders in the last one year.
14. Average cost of acquisition of

shares for promoter and selling
shareholders.
15. Size of the pre-IPO placement and

allottees, upon completion of the
placement
16. Any issuances of equity shares

made in the last one year for
consideration other than cash.
17. Any split/consolidation of equity

shares in the last one year.
97. Green Shoe Option Clause VI (C) (3) Clause 7 (Q) (c) 1. The provision has been
altered and provides
The ICDR 2009 required the issuer to The ICDR 2018 requires the issuer to flexibility to an issuer to
disclose the period for which the issuer disclose the maximum period for which close the stabilisation
proposes to avail of the stabilisation the issuer proposes to avail of the earlier in the event it
mechanism. stabilization mechanism and in case the believes that the price has
issuer proposes to close the stabilisation already stabilised and no
mechanism prior to the maximum further intervention is
period, a disclosure to that effect is required.
required to be made.
98. Capital structure Clause (VI) (D)(o)(i) Clause 8 (B) (f) (i) 1. To align it with the
requirements under the
The ICDR 2009 required the issuer to The ICDR 2018 requires the issuer to SEBI LODR Regulations.
disclose the ten largest shareholders as on disclose the names of the shareholders of 2. Disclosure of major
the date of registering the offer document the issuer holding 1% or more of the shareholders is on the basis
76
with the Registrar of Companies. paid-up capital of the issuer as on the of persons holding 1% or
date of filing of the draft offer more of the paid-up capital
document/ or end of last week from the instead of top 10
date of draft letter of offer and the offer shareholders.
document, as the case may be, provided
that details of shareholding aggregating
at least 80% of capital of company are
disclosed.
99. There was no requirement of disclosure of Clause 8 (B) (p) (iv) 1. The ICDR 2018 now
the exercise price under the ICDR 2009. requires a disclosure of the
The ICDR 2018 requires the issuer to exercise price of the
disclose the exercise price in relation to options granted. The
options granted to employees in disclosures in relation to
pursuance of any employee stock option ESOPs aligned with the
scheme prior to the initial public offer, applicable accounting
which are outstanding at the time of the standards for ESOPs/
initial public offer. guidance note from ICAI.
100. Similar provision under the ICDR 2008. Clause 8 (B) (p) (x) 1. The disclosures in relation
However, options granted to senior to ESOPs aligned with the
management personnel were required The ICDR 2018 requires the issuer to applicable accounting
instead of key managerial personnel. disclose the details of options granted standards for ESOPs/
Further, the intention of holders of equity and shares issued to key managerial guidance note from ICAI.
shares to sell equity shares which have personnel. The ICDR 2018 also requires
been allotted pursuant to exercise of the issuer to disclose the intention of key
options within three months after listing managerial personnel and whole time
has now been limited to key managerial directors to sell their equity shares
personnel and whole-time directors only. within three months after the date of
listing.
101. Clause (VI) (D)(r)(xiii) - 1. The ICDR 2018 have

omitted the disclosure in
The ICDR 2009 required disclosure of the relation to weighted
weighted average exercise prices and average exercise prices and
weighted average fair values of options weighted average fair
whose exercise price either equals or values of options whose
77
exceeds or is less than the market price of exercise price either equals
the stock, which has now been deleted. or exceeds or is less than
the market price of the
stock. The disclosures in
relation to ESOPs aligned
with the applicable
accounting standards for
ESOPs/ guidance note
from ICAI.
102. Business Strategy Clause VIII (B) (2)(b) - 1. The ICDR 2018 has
omitted this disclosure.
The issuer was required to disclose a brief
statement about future prospects under the
ICDR 2009.
103. History and Certain Clause VIII (D) (1) (a) Clause 10 (D) (1) (c) 1. Disclosure of amendments
Corporate Structure of in MOA has been
the Issuer Similar provision under the ICDR 2009. Main objects as set out in the in the restricted to last 10 years
memorandum of association of the (as opposed to disclosure
issuer and dates on which the of the same since
memorandum of association was incorporation).
amended, citing the details of such
amendments for the last ten years.
104. Clause VIII (D) (1) (G) Clause 10 (D) (1) (c) 1. ICDR 2018 requires
disclosure of material
Similar provisions under the ICDR 2009. Details regarding material acquisitions acquisitions or divestments
or divestments of business / of business / undertakings,
undertakings, mergers, amalgamation, mergers, amalgamation,
any revaluation of assets etc., if any, in any revaluation of assets
the last ten years. etc., if any.
2. Aforesaid disclosure is
subject to time cap of last
ten years.
3. Disclosures related to
divestments were not
78
required under the ICDR
2009.
105. Clause (VIII)(D)(1)(c)and (3) Clause (10)(D)(3) In addition to subsidiaries, the
details of joint ventures is also
The ICDR 2009 required complete details The following details of the joint required to be disclosed.
of the subsidiaries and holding company, ventures in addition to the details of the
if applicable, to be disclosed. holding company,
subsidiary/subsidiaries are required to be
Further, the following details of the disclosed under the ICDR 2018 -
subsidiary of the issuer were required to (a) Name of the holding
be disclosed. company/subsidiary/joint venture;
(a) Name of the subsidiary; (b) nature of business;
(b) nature of business; (c) capital structure;
(c) capital structure; (d) shareholding of the issuer;
(d) shareholding of the issuer; (e) amount of accumulated profits or
losses of the subsidiary(ies) not
(e) amount of accumulated profits or
accounted for by the issuer.
losses of the subsidiary(ies) not accounted
for by the issuer;
106. Shareholders' Clause VIII (D) (4) Clause 10 (E) (b): 1. The ICDR 2009 did not
agreements and other require disclosure of
agreements Similar disclosure requirements under the The ICDR 2018 requires the issuer to agreements entered into by
ICDR 2009. disclose key terms of shareholders’ a key managerial personnel
agreements, agreements entered into by or director or promoter or
key managerial personnel or director or any other employee of the
promoter or any other employee of the issuer, either by
issuer with any shareholder or third themselves or on behalf of
party with regard to compensation or any other person, with any
profit sharing in connection with shareholder or any other
dealings in the securities of the issuer, third party with regard to
guarantees given by promoter offering compensation or profit
its shares in the proposed offer for sale sharing in connection with
and material agreements including with dealings in the securities of
strategic partners, joint venture partners the issuer.
and/or financial partners, entered into, 2. This disclosure
other than in the ordinary course of requirement has been
79
business of the issuer. inserted to align with the
requirements under SEBI
LODR Regulations, which
require board and
shareholders’ approval for
entering into such an
agreement.
3. This will impact the
arrangements typically
between Promoters and
Investors, wherein profits
or compensation are made
dependent on dealings in
the securities, which were
also generally being
disclosed under the section
‘History and Certain
Corporate Matters’.
4. If any such arrangement
persists on listing of
equity, then board and
shareholders’ approval
shall be obtained post
listing.
5. Agreements entered into
by a KMP with any
shareholder or any other
third party for
compensation or profit
sharing in connection with
dealings in the securities of
the issuer is categorized as
a material agreement,
which would now have to
be made available for
inspection.
80
107. Clause (VIII)(D)(5) Clause (10)(E)(d) 1. Details of all subsisting
material agreements (not in
The ICDR 2009 required the details of ICDR 2018 requires the disclosure of the ordinary course of
every other material contract (not entered key terms of the subsisting material business) will require to be
into the ordinary course of business for agreements, in addition to the dates, disclosed, instead of
more than two years before the date of parties to and general nature of the agreements entered in two
filing the offer document) such as date, contract, entered into other than in the years under ICDR 2009.
parties and general nature to be ordinary course of business of the issuer, 2. The disclosure on material
disclosed. including with strategic partners, joint contracts should only be
venture partners and/or financial restricted to the standard
partners. practice of including
shareholder specific and/or
business rearrangement
agreements, including,
shareholders’ agreement,
short summary of share
purchase agreements, joint
venture agreement and
business transfer
agreements.
108. – Clause (10)(G)(j) 1. In addition to disclosure of

guarantees given by the
Brief details of material guarantees, if promoter selling
any, given to third parties by the shareholders, the ICDR
promoters with respect to specified 2018 required disclosure of
securities of the issuer. details of material
guarantees given to third
parties by the promoters
with respect to specified
securities of the issuer
irrespective of whether the
promoters are selling
shares in the IPO.
109. Management Clause (VIII) (E) (4) (a) (ii) Clause (10) (F) (d) (i) 1. The ICDR 2018 requires
the issuer to disclose the
81
Similar disclosures were required under The ICDR 2018 requires disclosure of interest of directors in
the ICDR 2009. the nature and extent of interest, if any, property acquired by the
of every director in the issuer, including issuer. The ICDR 2009 had
in any property acquired or proposed to prescribed a period of two
be acquired of the issuer or by the issuer years preceding the date of
or in the promotion or formation of the the offer document in
issuer. relation to this disclosure
which has now been
deleted.
110. Clause VIII (E) (7) Clause 10 (F) (g) 1. The names of the members
and the terms of reference
Previously under ICDR 2009, a disclosure A statement that the issuer has complied of the stakeholders’
stating that the statement of compliance with the requirements of corporate relationship committee and
has been made in accordance with the governance relating to the composition the risk management
Listing Agreement was to be included. of its board of directors, constitution of committee are required to
committees such as audit committee, be disclosed in addition to
Previously, the details such as names of nomination and remuneration the audit committee and
the members and the terms of reference of committee, stakeholders relationship remuneration committee.
the stakeholders’ relationship committee committee, as provided under Securities
and the risk management committee (if and Exchange Board of India (Listing 2. SEBI has now clarified
applicable) were not required to be Obligations and Disclosure that details of only
disclosed in addition to the audit Requirements) Regulations, 2015 committees as required
committee and remuneration committee. (“SEBI LODR Regulations”) is under the SEBI LODR
required to be included. Regulations are required to
The details of stakeholder’s relationship be disclosed. The practice
committee and risk management earlier, in some occasions,
committee have to be mentioned was to extend the
additionally along with the audit disclosures to other board
committee and remuneration committee. of directors appointed
committees as well.
111. Promoters / principal Clause (F) (1) (a) Clause (G) (a) (i) 1. The ICDR 2018 has deleted
shareholders the disclosure in relation to
In addition to the other disclosures, the The following details in relation to the voter id number of the
voter id number of the Promoter was promoter have to be disclosed under Promoter.
required to be disclosed under the ICDR ICDR 2018:
82
2009. i) Permanent Account Number;
ii) Aadhaar card number;
iii) Complete profile (including name,
date of birth, age, personal address,
educational qualifications,
experience in business, positions
held in past, directorship held, other
ventures of promoter, special
achievement, business and financial
activities);
iv) Photograph; and
vii) Driving license number.
112. Clause (F) (8) Clause (G) (h) 1. The ICDR 2018 has
increased the period for the
The requirement to disclose the nature The nature and extent of interest of the disclosure in relation to the
and extent of interest of the promoters, promoters, directors and group interest of the promoters,
directors and group companies in any companies in any property acquired by directors and group
property acquired by the issuer was the issuer in the preceding three years is companies in any property
limited to the preceding two years under required to be disclosed under the ICDR acquired by the issuer from
the ICDR 2009. 2018. two to three years.
However, the section
Management does not
prescribe any time cap on
this disclosure vis-à-vis
directors.
113. The disclosure pertaining to the list of Clause (G) (k) 1. In certain cases, where
promoter group individual and entities such disclosure was not
was not required to be disclosed under the A list of all individuals and entities included in the draft offer
ICDR 2009. forming part of the promoter group has document or the offer
to be disclosed under the ICDR 2018. document, it was included
in the SEBI cover letter
filed at the time of
submitting the draft offer
document with SEBI.
SEBI has now instructed
83
that this information be
included in the draft offer
document and the offer
document itself.
114. Objects of the Issue - Clause 9 (A)(2) 1. ICDR 2018 provide for a
new requirement for
If one of the objects of the issue is loan disclosure of details of
repayment: loan proposed to be repaid
of issue proceeds.
(a) details of loan proposed to be repaid
such as name of the lender, brief 2. Requirement of obtaining a
terms and conditions and amount certificate is specified to be
outstanding; from statutory auditors,
which earlier was obtained
(b) certificate from the statutory auditor from Independent CA.
certifying the utilization of loan for
the purpose availed.
115. Clause (VIII) (B)(6)(a) Clause (9)(A)(6) 1. ICDR 2018 provides for
disclosure regarding
In ICDR 2009, the names of the entities In ICDR 2018, a similar disclosure is acquisition of land if in
from whom the land has been acquired/ required in the event of proceeds from case the proceeds of the
proposed to be acquired along with the the issue being utilized for the issue are being utilized for
cost of acquisition, relation, if any, of acquisition of land. acquisition of land.
such entities to any promoter or director
of the issuer was required to be disclosed.
116. Clause (VIII)(B) (5) Clause (9)(A)(8) 1. Disclosure for all the
properties to be acquired
ICDR 2009 required the following ICDR 2018 provides for similar line from issue proceeds shall
disclosures in relation to the purchase of items as included in ICDR 2009, except be disclosed in the offer
property – for exceptions which are now deleted documents.
(a) In respect of any property referred to under ICDR 2018.
in sub-clause (b):
i) the names, address, descriptions
and occupations of the vendors;
ii) the amount paid in cash, shares
84
or debentures to the vendor
specifying the amount paid or
payable for goodwill;
iii) the nature of the title or interest
in property;
iv) details of the transaction
alongwith the relating to the
property completed within the
two preceding years;
(b) the property to which sub-clause (a)
is applicable to the property
purchased or acquired by the issuer
which is to be paid for wholly or
partly out of the proceeds of the issue
offered for subscription by the offer
document or the purchase or
acquisition of which has not been
completed at the date of issue of the
offer document other than property:
(i) the contract for the purchase or

acquisition whereof was entered into
in the ordinary course of the issuer’s
business, the contract not being made
in contemplation of the issue nor the
issue in consequence of the contract;
or
(ii) as respects which the amount of

the purchase money is not material.
a. for the purpose of this clause,
where a vendor is a firm, the
members of the firm shall not be
treated as separate vendors;
b. if the issuer proposes to acquire a
business which has been carried
on for less than three years, the
85
length of time during which the
business has been carried.
117. Clause (IX)(B)(4) and (5) Clause (11)(I)(B)(ii) -
The following criteria were applicable if The ICDR 2018 modified the criteria for
the proceeds of the issue of the shares or the utilisation of issue proceeds for
debentures were to be applied in the acquisition of one or more material
purchase of business and in the purchase businesses or entities as follows –
of any interest in any business –
(i) audited balance sheets, profit and
(i) the profits or losses of the business of loss, cash flow for the latest three
each of the five financial years fiscals and stub period (if available)
immediately preceding the issue of the prepared as per framework
offer document; and applicable to the business or
(ii) the assets and liabilities of the subsidiary proposed to be acquired,
business at the last date to which the in the offer document.
accounts of the business were made up, (ii) the proposed acquisition (covering
being a date not more than one hundred all businesses or subsidiaries
and twenty days before the date of the proposed to be acquired) shall be
issue of the offer document. considered material if it will make
20% or more contribution in
aggregate to either turnover, or net
worth or profit before tax of the
issuer, on a consolidated basis, as
per the latest financial information.
118. Particulars of Issue Clause (VII)(L) Clause (9)(L) 1. ICDR 2018 requires
inclusion of special tax
Tax Benefits: Any special tax benefits for Any special tax benefits (under direct benefits to the material
the issuer and its shareholders. and indirect tax laws) for the issuer and subsidiaries in addition to
its shareholders and its material the issuer and its
subsidiaries identified in accordance shareholders.
with the Securities and Exchange Board
of India (Listing Obligations and
Disclosure Requirements) Regulations,
2015.
86
119. Clause (VII)(K)(1) Clause (9)(K)(1) -
The ICDR 2009 required the disclosure in The ICDR 2018 now requires the
relation to the basis for issue price, floor disclosure in relation to the basis for
price or price band. issue price, floor price or price band on a
consolidated basis.
120. Dividend Policy Clause (H) Clause (H) 1. Under ICDR 2018,
dividends only for the last
The precise disclosures related to Details of the policy such as mode of three years and stub period
dividend were not provided under the payment of dividend, dividend paid in prior to the date of the
ICDR 2009. last three financial years and stub period document are to be
along with the dividend paid in the disclosed.
period between the last audited period
and date of filing the draft offer
document / draft letter of offer and offer
document is required to be disclosed.
121. Financial Statements Clause (IX) (B) (1) Clause (11) (I) (A) (i) 1. SEBI has now stated clearly
that the determination is
Financial statements for five years and Consolidated financial statements for done purely on the basis of
stub period (if applicable) had to be three years and stub period (if consolidated financial
disclosed under ICDR 2009. applicable) have to be disclosed under statements. Earlier, there
the ICDR 2018. was no clarity and,
conservatively, analysis
In accordance with Ind AS 34, complete would happen on both
consolidated financial information shall standalone and consolidated
be provided for stub period but the basis.
issuer is exempt from presenting
comparatives for the stub period but has 2. The disclosure requirements
an option to present the comparatives for under ICDR 2018 in
the stub period as well. relation to the financial
statements have been
limited to a period of three
years and stub period, if
applicable.
87
122. Clause (IX) (B) (23) Clause (11) (I) (B) (iii) 1. The ICDR 2018 has
changed the criteria for the
The proforma financial statements under The proforma financial statements are preparation of proforma
ICDR 2009, were required to be prepared required to be prepared under ICDR financial statements to now
if the total book value of the assets of the 2018, if the acquired / divested business include turnover, networth
acquired / divested entity amounted to or subsidiary in aggregate contributes to or profit before tax in the
more than 20% of the pre – acquisition / 20% or more of turnover, networth or latest annual consolidated
pre – divestment book value of the assets profit before tax in the latest annual financial statements of the
or the total income of the acquired / consolidated financial statements of the company.
divested entity amounted to more than company.
20% of the pre – acquisition / pre – 2. SEBI has now stated clearly
divestment of the total income of the that the determination is
company. done purely on the basis of
consolidated financial
statements. Earlier, there
was no clarity and,
conservatively, analysis
would happen on both
standalone and consolidated
basis.
3. Earlier, proforma test had to

be done on the basis of
acquisition or divestment
made after the end of the
latest annual financial
results, even if stub period
thereafter was being
included in the DRHP.
ICDR 2018 now applies the
test only if such acquisition
or divestment is done post
the financial statements
disclosed in the
DRHP/RHP.
88
4. SEBI has now specifically
allowed companies to
voluntarily add pro forma
statements even where it
not triggered.
5. Further, in case of non-

material acquisitions /
divestments disclosures in
relation to the fact of the
acquisition / divestment,
consideration paid/received
and mode of financing shall
be certified by the statutory
auditor of the issuer
company.
6. The ICDR 2018 expressly

permits inclusion of
comparatives for stub
period also in the offer
document (on an optional
basis), thereby providing
the flexibility to include
discussion on the stub
period in the MD&A as
well.
123. Outstanding The ICDR 2009 did not require a separate Clause (12) (A) (1) (iii) 1. Earlier the disclosure
Litigations and disclosure in relation to penalty imposed requirement was required
Material Developments or action outstanding by SEBI or stock The litigation involving issuer, director, for issuer, its directors,
exchanges against the promoters in the promoter, group companies, promoters, group
last five financial years. However, the subsidiaries. companies and
disclosure of outstanding actions by SEBI subsidiaries. ICDR 2018
or stock exchanges was required to be The following litigation for the above has deleted the requirement
disclosed under actions by statutory or parties is required to be disclosed: for group companies and
regulatory authorities. now litigation disclosure
89
a. Criminal proceedings; for group companies is
b. All actions by regulatory and restricted to outstanding
statutory authorities; litigations which have a
c. Disciplinary actions including material impact on the
penalty imposed by SEBI or stock issuer.
exchanges against the promoters in 2. The ICDR 2018 has
the last five financial years; included an additional
d. Tax proceedings; disclosure in relation to the
e. Other pending litigation as per the disciplinary action
materiality policy of the issuer. including the penalty
imposed or action
outstanding by SEBI or
stock exchanges against the
promoters in the last five
financial years. This
requirement was in the risk
factor section in the ICDR
2009, which did not
prescribe any time frame
and was required for issuer,
promoters, whole time
directors and group
companies.
124. Clause (X) (A) (2) (iii) Clause (12) (A) (2) (iii) 1. The requirement to disclose
details of outstanding dues
Similar disclosures were required under ICDR 2018 requires the following on the website of the issuer
ICDR 2009. However, only the details to be disclosed: has been reduced to
outstanding dues to the creditors were outstanding overdues to
required to be disclosed on the website of a. The consolidated number of material creditors.
the issuer. creditors and the aggregate amount 2. The disclosure requirement
involved based on the materiality in the offer documents is
policy of the issuer; for outstanding dues
b. Outstanding dues to micro, small whereas the disclosure
and medium enterprises and other requirement on the website
creditors; is for outstanding overdues.
c. The complete details of the
90
outstanding overdues to material
creditors alongwith the name and
amount involved with a link to the
website of the company.
125. Government Approvals Clause (X) (B) Clause (12) (B) (2) 1. The scope of related to
government approvals has
All the government and other approvals The government and other approvals now been reduced to
including the technical approvals were which are material for the company and material approvals for the
required to be disclosed under the ICDR for its material subsidiaries are required company and only for its
2009. to be disclosed including investment material subsidiaries.
approvals, letters of intent or industrial
licenses, declarations from statutory or
regulatory authorities about the non-
responsibility of financial soundness or
correctness of the statements.
126. Information with Clause (IX) (C) Clause (13) -

respect to the group
companies The financial information was required to Financial information of sick group
be given for every group company which company, company under winding up or
had become sick industrial company or company with negative networth is not
was under winding up or had negative required to be disclosed under ICDR
networth under ICDR 2009. 2018.
127. Clause (IX) (C) (i) Clause (13) (A) (ix) -
ICDR 2009 required disclosure of the ICDR 2018 requires an issuer to disclose
highest and lowest market price of shares only the highest and lowest market price
of listed group companies, the change in of shares during the preceding six
capital structure during the period and the months for listed group companies.
market value on the date of registering the
offer document with the Registrar of
Companies.
91
128. Clause (IX) (C) (j) Clause 13(A) (x) 1. The disclosure pertaining
Under the ICDR 2009, if a group The ICDR 2018 requires disclosure of to the particulars of
company had made any public or rights only the issue price of the security and changes in the capital
issue in preceding three years, the issue the current market price of the securities structure since the date of
price of the security, the current market of the listed group company who had issue and a statement
price, particulars of changes in the capital made public or rights issue. regarding the cost and
structure, if any, since the date of issue progress of implementation
and a statement regarding the cost and of the project in
progress of implementation of the project comparison with the cost
in comparison with the cost and and implementation
implementation schedule was required to schedule is no longer
be disclosed. applicable.
129. Clause (IX) (C) (5) There is no requirement under the ICDR -
2018 to disclose the sales or purchases
Sales or purchases between the group between group companies / subsidiaries
companies / subsidiaries / associate / associate companies exceeding in
companies exceeding 10% in aggregate of aggregate 10% of the total sales or
the total sales or purchases of the purchases of the company.
company was required to be disclosed.
130. Clause (X) (A) (1) Clause (13) (D) 1. The requirement to
disclose litigation in
Litigations involving the group ICDR 2018 requires only the litigations relation to group
companies were required to be disclosed having material impact on the company companies has been
in the same manner as required in relation to be disclosed. reduced to such litigation
to the issuer under ICDR 2009. which has a material
impact on the issuer.
131. Other Regulatory and Clause (XI) (B) Clause (14) (B) 1. The ICDR 2018 has
Statutory Disclosures extended the disclosure
The disclosure pertaining to prohibition The disclosure pertaining to prohibition pertaining to the
from accessing the capital markets or the from accessing the capital markets or the debarment of the
debarment from buying, selling or dealing debarment from buying, selling or company, promoter,
in securities under any order or direction dealing in securities under any order or promoter group, directors
passed by the SEBI or any securities direction passed by the SEBI or any and persons in control of
market regulator in any other jurisdiction securities market regulator in any other the company to selling
92
or any other authority/court was limited jurisdiction or any other authority/court shareholders as well.
only to the company, promoter, promoter of the company, promoter, promoter
group, directors and persons in control of group, directors and persons in control
the company. of the company has now been extended
to selling shareholders as well.
132. The disclosure with respect to Companies Clause (14)(C) 1. In ICDR 2009, the
(Significant Beneficial Ownership) Rules, disclosure with respect to
2018 was not required to be included. The disclosure pertaining to the Companies (Significant
compliance by the promoters, promoters Beneficial Ownership)
group or selling shareholders with the Rules, 2018 was not
Companies (Significant Beneficial required to be included.
Ownership) Rules, 2018 is required to However the same has
be included. been added in ICDR 2018.
2. It may be noted that in
terms of Rule 8 of the SBO
Rules, the said rules do not
apply to the holding of
shares of companies/body
corporates, in case of
pooled investment
vehicles/investment funds
such as Mutual Funds,
Alterative Investment
Funds (AIFs), Real Estate
Investment Trusts (REITs)
and Infrastructure
Investment Trusts (InvITs)
regulated under SEBI Act.
Therefore, these rules may
not apply to every selling
shareholder.
133. Clause (XI) (C) Clause (14) (D) 1. In the ICDR 2018, the
confirmation with respect
The confirmation with respect to the The confirmation with respect to the to the association of the
association of the directors with the association of the directors with the directors with the
93
securities market business and securities market business and securities market business
outstanding action initiated against them outstanding action initiated against them and outstanding action
was not limited to any time period. by SEBI has now been restricted to five initiated against them by
years. SEBI has now been
restricted to five years.
134. Clause (XI) (E) The confirmation with respect to the 1. The confirmation with
wilful defaulter is not required under this respect to the wilful
The confirmation pertaining to wilful chapter. defaulter is not required to
defaulters by the issuer, promoters, group be given under ICDR 2018
companies, the relatives of promoters and in this chapter. However,
group companies was required to be the same still remains to be
provided. an eligibility requirement
under regulation 5 of the
ICDR 2018.
135. Clause (XI) (L) The disclosure pertaining to the address 1. The disclosure pertaining
of the Registrar of Companies and of to the address of the
The address of Registrar of Companies SEBI is not required to be provided. Registrar of Companies
and SEBI were required to be disclosed and SEBI where the offer
document is registered has
been excluded under the
ICDR 2018.
136. Clause (XI) (K) Clause (14) (J) -
Previously, the disclaimer clause of only The ICDR 2018 requires the disclaimer
Reserve Bank of India and Insurance and clause of Reserve Bank of India and
Regulatory Development Authority of Insurance and Regulatory Development
India was required to be disclosed. Authority of India and other relevant
regulatory authority to be disclosed.
137. Clause (XI) (H) The disclosure requirement of caution -

has been removed.
The disclosure in relation the caution was
required to be disclosed.
94
138. Clause (XI) (Q) Clause (14) (N) 1. In the ICDR 2018, the
disclosure pertaining to the
For previous public or rights issue (during The disclosure pertaining to the amount amount paid or payable by
last five years), the said disclosure had to paid or payable by premium, date and premium, date and
be included. proposed dates of issue and shares have proposed dates of issue and
been or are to be issued at a premium shares have been or are to
and other shares of the same class at a be issued at a premium and
lower premium, or at par or at a other shares of the same
discount, the reasons for the class at a lower premium,
differentiation and how any premiums or at par or at a discount,
received have been or are to be disposed the reasons for the
of for the previous public or rights issue differentiation and how
is not required to be disclosed. any premiums received
have been or are to be
disposed of for the
previous public or rights
issue is not required to be
disclosed.
139. Clause (XI) (Q) Clause 14 (O) 1. The ICDR 2018 restricts
the disclosure for
Similar disclosure was required under The disclosure in relation to the commission and brokerage
ICDR 2009, however, no period was commission or brokerage on previous on previous issued to five
prescribed. issues has been restricted to five years years.
under ICDR 2018.
140. There was no such format prescribed for Clause 14 (R) 1. The ICDR 2018 provides a
disclosing the past price issues handled by format for the past price
lead managers. The format for the past price issues issues handled by the lead
handled by the lead managers has been managers.
provided.
141. Clause (XI) (U) Clause (14) (Q) 1. The time period for listing
of public / rights issues is
The list of public / rights issues made by The time period for the list of public / limited to five years and
95
the company during ten years was rights issues is limited to five years and the disclosure with respect
required to be disclosed. Additionally, the disclosure with respect to the objects to the objects mentioned in
disclosure pertaining to the objects mentioned in the offer document of last the offer document of last
mentioned in last three issues were met three issues is not required to be three issues is not required
was required to be given. disclosed. to be disclosed under the
ICDR 2018. Under ICDR
2018, promise v.
performance disclosures is
not required for listed
group companies and listed
associates.
142. Clause (XI) (V) 1. The disclosure pertaining

The disclosure pertaining to the to the outstanding
The disclosure with respect to the outstanding debentures or bonds and debentures or bonds and
outstanding debentures or bonds and redeemable preference shares and other redeemable preference
redeemable preference shares and other instruments issued by the issuer shares and other
instruments issued by the company outstanding as on the date of offer instruments issued by the
outstanding as on the date of offer document and terms of issue is not issuer outstanding as on
document and terms of issue was required required to be included. the date of offer document
to be included. and terms of issue is not
required to be included in
the ICDR 2018.
143. Offering Information Clause (XII) (B) (2) Clause (15) (B) (2) -
ICDR 2009 had the option to subscribe to The ICDR 2018 clarifies that the
the securities in physical and demat form. disclosure pertaining to the option to
However, this requirement was subscribe in the issue only in
inapplicable in accordance with the dematerialized form in terms of
Companies Act. Companies Act is required to be
included.
144. Clause (XII) (B) (4) Clause (15) (B) (3) -
The escrow mechanism under ICDR 2009 Under ICDR 2018, the escrow
was through the escrow account of the mechanism is restricted to only the
96
company and the syndicate member. escrow account of the company, for
However, all applications except anchor subscription by anchor investors.
investors are required to make through
ASBA mechanism.
145. Clause (XII) (B) (15) Clause (15) (B) (14) -
The payment instructions for payment The payment mechanism under ICDR
into escrow account of the syndicate 2018, is now restricted through the
members under the ICDR 2009 is no escrow account of the company and
longer applicable. through ASBA.
146. Clause XII (B) (18) - 1. This instruction

requirement has been
The ICDR 2009 required a disclosure deleted under the ICDR
pertaining to the application form 2018.
containing space for indicating number of
specified securities in demat and physical
form.
147. Clause XII (B) (19) - 1. This instruction

requirement has been
The ICDR 2009 contained instructions deleted under the ICDR
with respect to separate applications for 2018.
demat and physical shares and the
applications for physical shares were
treated as multiple shares.
148. Clause XII (B) (20) - -
The instructions with respect to partial

allotment in demat option and balance, if
any, in physical form has been deleted.
149. Clause XII (B) (32) Clause (15) (B) (28) 1. The disclosure was
restricted only to non –
97
The disclosure in relation to the foreign The restrictions on foreign ownership of resident Indians and
ownership was required only for non – Indian securities now require disclosure foreign portfolio investors
resident Indians and foreign portfolio with respect to other non-residents, in under the ICDR 2009.
investors under ICDR 2009. addition to non – resident Indians and
foreign portfolio investors.
98
ANNEX B
Comparison of the index/ format of ICDR 2018 with the provisions of the ICDR 2009
Places where these particulars appear in the SEBI

Serial Number Particulars Page Number
(ICDR) 2009
I Regulations
1 Chapter I - Preliminary 1 Chapter I - Preliminary
2 Chapter II - Initial Public Offer on Main Board 8

Chapter III – Provisions as to Public Issue
2.1 Part I: Eligibility Requirements 8
Part I – Eligibility Requirements
Chapter II – Common conditions for Public Issues and
2.2 Part II: Issue of Convertible Debt Instruments and Warrants 11
Rights Issues
2.3 Part III: Promoters’ Contribution 12
Part III – Promoters’ Contribution
2.4 Part IV: Lock-in and Restrictions on Transferability 14 Part IV – Restriction on Transferability (Lock-in) of
Promoters’ Contribution, etc.
Part V: Appointment of Lead Managers, other Chapter II – Common conditions for Public Issues and
2.5 16
Intermediaries and Compliance Officer Rights Issues
2.6 Part VI: Disclosures in and Filing of Offer Documents 17 Chapter V – Manner of Disclosures in the Offer Documents
2.7 Part VII - Pricing 19
Part II – Pricing in Public Issue
2.8 Part VIII: Issuance Conditions and Procedure 20
Part V – Minimum Offer to Public, Reservations, etc.
Rights Issues
2.9 Part IX: Miscellaneous 26 &
3 Chapter III - Rights Issue 28

Rights Issues
Rights Issues
99

(ICDR) 2009
3.3 Part III: Record Date 31 Chapter IV – Rights Issue
Part IV – Appointment of Lead Managers, other Chapter II – Common conditions for Public Issues and
3.4 31
3.5 Part V: Disclosures in and Filing of Letters of Offer 32 Chapter V – Manner of Disclosures in the Offer Documents
3.6 Part VI: Pricing 33 Chapter IV – Rights Issue
Rights Issues
3.7 Part VII: Issuance Conditions and Procedure 34
&
Chapter IV – Rights Issue
3.8 Part VIII: Miscellaneous 39
Rights Issues
3.9 Part IX: Fast Track Rights Issue 39
Rights Issues
4 CHAPTER IV - FURTHER PUBLIC OFFER 41

Rights Issues &
Rights Issues
4.5 47
4.6 Part VI: Disclosures in and Filing of Offer Documents 48 Chapter V – Manner of Disclosures in the Offer Documents
4.8 Part VIII: Issuance Conditions and Procedure 51
4.9 Part IX: Miscellaneous 57
Rights Issues
4.10 Part X: Fast Track Further Public Offer 59
Rights Issues
100

(ICDR) 2009
5 Chapter V – Preferential Issue 61

5.1 Part I: Issuers ineligible to make a Preferential Issue 62 Chapter VII – Preferential Issue
5.2 Part II: Conditions for Preferential Issue 63 Chapter VII – Preferential Issue
5.3 Part III: Disclosures to Shareholders 64 Chapter VII – Preferential Issue
5.4 Part IV: Pricing 64 Chapter VII – Preferential Issue
5.5 Part V: Lock-in and Restrictions on Transferability 66 Chapter VII – Preferential Issue
5.6 Part VI: Consideration and Allotment 67 Chapter VII – Preferential Issue
6 Chapter VI – Qualified Institutions Placement 69

6.1 Part I: Conditions for Qualified Institutions Placement 69 Chapter VIII – Qualified Institutions Placement
6.2 Part II: Appointment of Lead Managers 70 Chapter VIII – Qualified Institutions Placement
6.3 Part III: Placement Document 70 Chapter VIII – Qualified Institutions Placement
6.4 Part IV: Pricing 71 Chapter VIII – Qualified Institutions Placement
6.5 Part V: Tenure of Convertible Securities 71 Chapter VIII – Qualified Institutions Placement
6.6 Part VI: Transferability 71 Chapter VIII – Qualified Institutions Placement
6.7 Part VII: Application and Allotment 72 Chapter VIII – Qualified Institutions Placement
Chapter VII - Initial Public Offer of Indian Depository

7 72
Receipts
7.1 Part I: Eligibility Requirements 72 Chapter X – Issue of Indian Depository Receipts
Part II: Appointment of Lead Managers, other
7.2 73 Chapter X – Issue of Indian Depository Receipts
Intermediaries and Compliance Officer
7.3 Part IV: Disclosures in and Filing of Offer Documents 74 Chapter X – Issue of Indian Depository Receipts
7.4 Part V - Pricing 75
Rights Issues
7.5 Part VI: Issuance Conditions and Procedure 76
&
Chapter X – Issue of Indian Depository Receipts
Chapter VIII - Rights Issue of Indian Depository

8 81 Chapter XA of Indian Depository Receipts
Receipts
Chapter IX - Initial Public Offer by Small and Medium

9 84
Enterprises
9.1 Part I: Eligibility Requirements 84 Chapter III – Provisions as to Public Issue
101

(ICDR) 2009
&
Chapter XB – Issue of Specified Securities by Small and
Medium Enterprises
Rights Issues
9.5 91
Chapter V – Manner of Disclosures in the Offer Documents
&
9.6 Part VI: Disclosures in and Filing of Offer Documents 91
Medium Enterprises
9.8 Part VIII: Issuance Conditions and Procedure 93 &
Medium Enterprises
Rights Issues
9.9 Part IX: Miscellaneous 100 &
10 Chapter X - Institutional Trading Platform 102

10.1 Part I: Applicability 102 Chapter XC – Listing on Institutional Trading Platform
10.2 Part II: Listing without a Public Issue 102 Chapter XC – Listing on Institutional Trading Platform
10.3 Part III: Listing pursuant to an Initial Public Offer 103 Chapter XC – Listing on Institutional Trading Platform
10.4 Part IV: General Conditions 104 Chapter XC – Listing on Institutional Trading Platform
11 Chapter XI - Bonus Issue 105 Chapter IX – Bonus Issue
102

(ICDR) 2009
12 Chapter XII - Miscellaneous 106 Chapter XII - Miscellaneous
II Schedules
Schedule I – Lead Managers’ Inter-se Allocation of

1 107 Schedule I - Inter-se Allocation of Responsibilities
Responsibilities
Schedule II - Format of Agreement between Lead

Schedule II - Contents of Agreement between Lead
2 108 Merchant Bankers to the Issue and Issuer/Issuing
Manager(s) and Issuer
Company
Schedule III - Fees to be paid along with Draft Offer

3 110 Schedule IV - Fees to be paid along with Offer Document
Document/ Draft Letter of Offer or Offer Document
4 Schedule IV – Filing of Offer Documents with the Board 111 Not Present
5 Schedule V - Formats of Due Diligence Certificates 112 Schedule VI- Formats Of Due Diligence Certificates
Form A - Format of due diligence certificate to be given by
Form A - Format of Due Diligence Certificate to be given by
5.1 the lead manager(s) along with draft offer document or draft 112
Merchant Banker along with Draft Offer Document
letter of offer
Form B - Format of due diligence certificate to be given by Form B - Format of Due Diligence Certificate to be given by
5.2 114
the debenture trustee along with draft offer document Debenture Trustee along with Draft Offer Document
Form C - Format of Due Diligence Certificate to be given
Form C - Format of due diligence certificate to be given by
by Merchant Banker at the time of registering Offer
5.3 the lead manager(s) at the time of registering offer 115
Document with the Registrar of Companies/filing Letter of
document/filing letter of offer
Offer with the Designated Stock Exchange
Form D - Format of due diligence certificate to be given by
5.4 the lead manager(s) in the event of disclosure of material 116 Not Present
events after the filing of the offer document
Form E - Additional confirmations/ certification to be given
Form F - Additional Confirmations/ Certification to be given
by the lead manager(s) in the due diligence certificate to be
5.5. 116 by Merchant Banker in Due Diligence Certificate to be
given along with the offer document/ letter of offer for a fast
given along with Offer Document for Fast Track Issue
track issue
Form F - Format of due diligence certificate to be given by Form G - Format of Due Diligence Certificate to be given by
5.6 117
the lead manager(s) along with the final post-issue report Merchant Banker along with Final Post Issue Report
103

(ICDR) 2009
Form G - Additional confirmations/ certification to be given
Form H - Additional Confirmations/Certification to be given
by the lead manager(s) in due diligence certificate to be
5.7 117 by Merchant Banker in Due Diligence Certificate to be
given along with offer document regarding issues on the
given along with Offer Document regarding SME Exchange
SME exchanges
Schedule XIX - Disclosures in Prospectus and Abridged
Form H - Format of the due diligence certificate to be filed Prospectus for Issue of Indian Depository Receipts - Part
5.8 118
by the lead manager for IDR issues C - Format of the due diligence certificate to be filed by the
lead manager for IDR issues
Schedule VI - Disclosures in the Offer Document, Schedule VIII - Disclosures in Offer Document,
6 120
Abridged Prospectus and Abridged Letter of Offer Abridged Prospectus and Abridged Letter of Offer
Part A - Disclosures in Red Herring Prospectus, Shelf

6.1 Part A – Disclosures in offer document/letter of offer 120
Prospectus and Prospectus
6.1.1 Cover pages 120

6.1.1.1 Front cover pages 120 Part A – Cover pages
6.1.1.2 Back cover pages 122
6.1.2 Table of Contents 122 Part A – Table of Contents
6.1.3 Definitions and abbreviations 122 Part A –Definitions and Abbreviations
6.1.4 Offer Document Summary 122 Part A – Prominent Notes
6.1.5 Risk Factors 123 Part A –Risk Factors
6.1.6 Introduction 125 Part A –Introduction
6.1.7 General information 125 Part A – Introduction - General Information
6.1.8 Capital Structure 127 Part A – Introduction -Capital Structure
6.1.9 Particulars of the issue 131 Part A –Particulars of the Issue
6.1.10 About the Issuer 136

Part A – About the Issuer
6.1.10.1 Industry Overview 136
104

(ICDR) 2009
6.1.10.2 Business Overview 136
6.1.10.3 Key Industry-Regulations (is applicable) 137
6.1.10.4 History and Corporate Structure of the issuer 137
6.1.10.5 Shareholders’ agreements and other agreements 137
6.1.10.6 Management 138
6.1.10.7 Promoters/principal shareholders 140
6.1.10.8 Dividend policy 142
6.1.11 Financial Statements 142 Part A – Financial Statements

Requirements in case Indian Accounting Standards (Ind AS)
6.1.11.1 is applicable in the latest period presented in Restated 142 Not Present
Financial Information
Requirements in case Indian GAAP is applicable in the
6.1.11.2 147 Not Present
latest period presented in Restated Financial Information
Financial Statements – Financial Information of the Issuer -
6.1.11.3 Financial Information of the Issuer in further public offers 152 Alternative Financial Information of the issuer in further
public offers
6.1.12 Legal and Other Information 154

6.1.12.1 Outstanding Litigations and Material Developments 154 Part A – Legal and Other Information
6.1.12.2 Government approvals 155
6.1.13 Information with respect to group companies 155 Dispersed
6.1.14 Other Regulatory and Statutory Disclosures 156 Part A –Other Regulatory and Statutory Disclosures
6.1.15 Offering Information 160

6.1.15.1 Terms of the Issue 160 Part A –Offering Information
6.1.15.2 Issue Procedure 161
Part A – Any other material disclosures, as deemed

6.1.16 Any other material disclosures, as deemed necessary 166
necessary
Part A – In case of a fast track issue, the disclosures

In case of a fast track issue, the disclosures specified in this
6.1.17 166 specified in this Part, which have been indicated in Part B,
Part, which have been indicated in Part B, need not be made
need not be made
105

(ICDR) 2009
6.1.18 Other Information 166 Part A –Other Information
6.2 Part B - Disclosures in a letter of offer 166 Part E –Disclosures in letter of Offer
6.2.1 Cover Pages 167

Part E – Cover Pages
6.2.2 Back cover pages 168
6.2.3 Table of contents 168 Part E –Table of Contents
6.2.4 Definitions and abbreviations 168 Part E –Definitions and Abbreviations
6.2.5 Letter of offer summary 169 Part E – Prominent Notes
6.2.6 Risk factors 169 Part E –Risk Factors
6.2.7 Introduction 170

6.2.7.1 Summary 170
Part E –Introduction
6.2.7.2 General Information 170
6.2.7.3 Capital Structure 171
6.2.8 Particulars of the Issue 171 Part E –Particulars of the Issue
6.2.9 History and Corporate Structure of the issuer 175 Part E –History and Corporate Structure about the Issuer
6.2.10 Management (Board of Directors) 175 Part E –Management (Board of Directors)
6.2.11 Financial Information of the issuer 176 Part E –Financial Information of the Issuer
Part E – A statement to the effect that the price has been

A statement to the effect that the price has been arrived at in
6.2.12 177 arrived at in consultation between the issuer and the
consultation between the issuer and the lead manager(s)
Merchant banker
6.2.13 Disclosures pertaining to wilful defaulters 177 Not Present
6.2.14 Outstanding Litigations and Defaults 178 Part E –Outstanding Litigations and Defaults
106

(ICDR) 2009
6.2.15 Government Approvals or Licensing Arrangements 178 Part E – Government Approvals or Licensing Arrangements
6.2.16 Material Developments 178 Part E –Material Developments
6.2.17 Other Regulatory and Statutory Disclosures 178 Part E – Other Regulatory and Statutory Disclosures
6.2.18 Offering Information 180 Part E – Offering Information
Part E – Undertakings by the issuer in connection with the

6.2.19 Undertakings by the issuer in connection with the issue 181
issue
6.2.20 Utilization of Issue Proceeds 182 Part E – Utilization of Issue Proceeds
Part E –Restrictions on foreign ownership of Indian

6.2.21 Restrictions on foreign ownership of Indian securities, if any 182
securities, if any
6.2.22 Statement regarding minimum subscription clause 183 Part E –Statement regarding minimum subscription clause
6.2.23 Statutory and other information 183 Part E –Statutory and other information
6.2.24 Any other material disclosures, as deemed necessary 183 Part E –Any other material disclosures, as deemed necessary
6.2.25 Declaration 183 Part E –Declaration
Part C - Certain disclosures not mandatory in case of a Part C - Certain disclosures not mandatory in case of a
6.3 183
further public offer further public offer
Part D - Certain disclosures not mandatory in case of a fast Part E - Certain disclosures not mandatory in case of a fast
6.4 184
track public issue track public issue
6.5 Part E - Disclosures in an abridged prospectus 184 Part D - Disclosures in an abridged prospectus
6.6 Part F - Disclosures in an abridged letter of offer 193 Part F - Disclosures in an abridged letter of offer
7 Schedule VII - Disclosures in a Placement Document 193 Schedule XVIII - Disclosures in Placement Document
8 Schedule VIII - Disclosures in Offer Document and 195 Schedule XIX - Disclosures in Prospectus and Abridged
107

(ICDR) 2009
Abridged Prospectus and Letter of Offer for Issue of Prospectus for Issue of Indian Depository Receipts
Indian Depository Receipts
Part A - Disclosures in offer document for issue of Indian Part A - Disclosures in Prospectus for Issue of Indian
8.1 195
depository receipts Depository Receipts
General instructions with respect to contents of the offer Part A - General instructions with respect to contents of the
8.1.1 195
document Prospectus
8.1.2 The issue 196 Part A -The issue
8.1.3 Forward-looking statements 196 Part A -Forward-looking statements
8.1.4 General Information 196 Part A - General Information
8.1.5 Risk Factors 197 Part A - Risk Factors and Management Perception, if any
8.1.6 Recent Developments 198 Part A - Recent Developments
Exchange-wise market price information and other Part A -Market price information and other information
8.1.7 information concerning the shares in the domestic market of 198 concerning the shares in the domestic market of the issuing
the issuing company company
8.1.8 Dividends 198 Part A - Dividends
8.1.9 Exchange rates 198 Part A - Exchange rates
Foreign investment and exchange controls of the country of Part A - Foreign investment and exchange controls of the
8.1.10 198
incorporation/where the shares are listed country of incorporation/where the shares are listed
8.1.11 Objects of the issue/use of proceeds 198 Part A - Objects of the issue/use of proceeds
8.1.12 Interim use of funds 199 Part A - Interim use of funds
8.1.13 Capitalization statement 199 Part A - Capitalization statement
8.1.14 Capital Structure 199 Part A - Capital Structure
108

(ICDR) 2009
8.1.15 Financial information 199 Part A - Financial information
Statement on material developments subsequent to the date Part A -Statement on material developments subsequent to
8.1.16 of the last financial statements as disclosed in the offer 201 the date of the last financial statements as disclosed in the
document Prospectus
Management discussion and analysis of the financial Part A - Management discussion and analysis of the
8.1.17 statements (by comparing the recent financial year with the 201 financial statements (by comparing the recent financial year
previous three financial years) with the previous three financial years)
8.1.18 Industry and business overview 202 Part A - Industry and business overview
8.1.19 Details of the issuing company 202 Part A - Details of the issuing company
8.1.20 Subsidiaries and associates of the issuing company 202 Part A - Subsidiaries and associates of the issuing company
8.1.21 Management 202 Part A - Management
Securities market of the country of incorporation where the Part A - Securities market of the country of incorporation
8.1.22 203
shares are listed where the shares are listed
8.1.23 Description of the IDR and rights of IDR holders 203 Part A - Description of the IDR and rights of IDR holders
Provisions regarding transfer of shares and depository Part A - Provisions regarding transfer of shares and
8.1.24 203
receipts depository receipts
Information relating to the depository - Indian and Part A - Information relating to the depository - Indian and
8.1.25 203
international international
8.1.26 Approvals of the government/regulatory authorities 203 Part A - Approvals of the government/regulatory authorities
Taxation framework in India and the country of Part A - Taxation framework in India and the country of
8.1.27 204
incorporation/ where shares are listed incorporation/ where shares are listed
8.1.28 Outstanding litigations and defaults 204 Part A - Outstanding litigations and defaults
109

(ICDR) 2009
8.1.29 Basis of issue price 204 Part A - Basis of issue price
Main provisions of articles of association/main charter of Part A - Main provisions of articles of association/main
8.1.30 204
the issuing company charter of the issuing company
8.1.31 Material contracts and documents for inspection 204 Part A - Material contracts and documents for inspection
8.1.32 Other information 205 Part A - Other information
Part B - Disclosures in an abridged prospectus for Indian Part B - Disclosures in an abridged prospectus for issue of
8.2 205
depository receipts Indian depository receipts
8.2.1 General Information 205 Part B - General Information
8.2.2 Capital Structure of the Issuing Company 206 Part B - Capital Structure of the Issuing Company
8.2.3 Terms of the Present Issue 206 Part B - Terms of the Present Issue
8.2.4 Instructions for Applicants 206 Part B - Instructions for Applicants
8.2.5 Particulars of the Issue 207 Part B -
8.2.6 Description of the IDRs and Rights of IDR Holders 207 Part B -
8.2.7 Business Model/ Business Overview and Strategy 207 Not Present
8.2.8 Exchange-wise stock market data 207 Part B – Company, Management and Project
8.2.9 Internal Risk Factors 207 Not Present
8.2.10 Outstanding Material Litigations and Defaults 207 Part B - Outstanding Material Litigations and Defaults
8.2.11 Material Developments 208 Part B - Material Development
8.2.12 Board of Directors 208 Part B – Company, Management and Project
8.2.13 Financial Performance of the Issuing company for the last 208 Part B – Financial Performance of the Issuing company for
110

(ICDR) 2009
three years the last three years
Part B – Disclosure on Investor Grievances and Redressal

8.2.14 Disclosure on Investor Grievances and Redressal System 208
System
Information relating to relevant provisions of taxation law, Part B – Information relating to relevant provisions of
8.2.15 208
tax treaties and their impact for IDR holders Taxation law, Tax Treaties and their impact for IDR holders
Brief details of the domestic depository, overseas custodian Part B – Brief details of the Domestic Depository, Overseas
8.2.16 208
bank and depository agreement Custodian Bank and Depository Agreement
8.2.17 Signatories to the Prospectus 208 Part B – Signatories to the Prospectus
Part C - Disclosures in the addendum to an offer document Schedule XXI – Part A - Disclosures in the addendum to an
8.3 208
for rights issue of Indian depository receipts offer document for rights issue of Indian depository receipts
8.3.1 Cover page 208 Part A - Cover page
8.3.2 Instructions for applicants 209 Part A - Instructions for applicants
8.3.3 General information 210 Part A - General information
8.3.4 Management (Board of Directors) 211 Part A - Management (Board of Directors)
8.3.5 Financial information of the issuer 211 Part A - Financial information of the issuer
8.3.6 Risk factors 211 Part A - Risk factors and Management Perception, if any
8.3.7 Capital structure 212 Part A - Capital Structure
8.3.8 Particulars of the issue 212 Part A - Particulars of the Issue
Market price information and other information concerning Part A - Market price information and other information
8.3.9 212
the shares/ IDRs concerning the shares/ IDRs
8.3.10 Exchange rates 213 Part A - Exchange Rates
111

(ICDR) 2009
8.3.11 Material litigations and defaults 213 Part A - Material Litigations and Defaults
8.3.12 Material development 213 Part A - Material Development
8.3.13 Material contracts and documents for inspection 213 Part A - Material Contracts and Documents for Inspection
8.3.14 Other regulatory and statutory disclosures 213 Part A - Other Regulatory and Statutory Disclosures
Part A - Undertakings by the issuer in connection with the

8.3.15 Undertakings by the issuer in connection with the issue 215
issue
8.3.16 Utilisation of issue proceeds 215 Part A - Utilisation of Issue Proceeds
Part A - Restrictions on foreign ownership of Indian

8.3.17 Restrictions on foreign ownership of Indian securities, if any 215
securities, if any
8.3.18 Any other material disclosures 215 Part A - Any other material disclosures
8.3.19 Declaration 215 Part A - Declaration
Part D - Disclosures in an abridged letter of offer for rights Part B - Disclosures in an abridged letter of offer for rights
8.4 216
issue of Indian depository receipts issue of Indian depository receipts
8.4.1 Instructions for applicants 216 Part B - Instructions for applicants
8.4.2 General information 216 Part B - General Information
8.4.3 Capital structure of the issuing company 217 Part B - Capital Structure of the issuing company
8.4.4 Terms of the present Issue 217 Part B - Terms of the Present Issue
8.4.5 Particulars of the issue 217 Part B - Particulars of the Issue
8.4.6 Company, management and project 217 Part B - Company, Management and Project
Part B - Outstanding Material Litigations and Defaults (in a

8.4.7 Outstanding material litigations and defaults 218
summarized tabular form)
112

(ICDR) 2009
8.4.8 Material development 218 Part B - Material Development
8.4.9 Time and Place of Inspection of material contracts 218 Part B - Time and Place of Inspection of material contracts
Financial Performance of the Issuing company as per last Part B - Financial Performance of the Issuing company as
completed accounting year for which audit has been per last completed accounting year for which audit has been
8.4.10 218
completed and for the latest stub period for which completed and for the latest stub period for which
audit/limited review has been completed audit/limited review has been completed
Part B - Disclosure on Investor Grievances and Redressal

8.4.11 Disclosure on Investor Grievances and Redressal System 218
System
Brief details of the Domestic Depository, Overseas Part B - Brief details of the Domestic Depository, Overseas
8.4.12 218
Custodian Bank and Depository Agreement Custodian Bank and Depository Agreement
8.4.13 Signatories to the Letter of offer 218 Part B - Signatories to the Letter of offer
Schedule IX – Public Communications and Publicity

9 218 Not Present
Materials
Schedule X - Formats of Advertisements for a Public Schedule XIII - Formats of Advertisements for a Public
10 221
Issue Issue
Part A - Format of pre-issue advertisement for a public issue

10.1 Part A - Format of pre-issue advertisement for a public issue 221
(Fixed price/ Book built)
Part B - Format of issue opening advertisement for a public Part B - Format of issue opening advertisement for a public
10.2 223
issue issue (Fixed price/ Book built)
Part C - Format of issue closing advertisement for a public Part C - Format of issue closing advertisement for a public
10.3 225
issue issue (Fixed price/ Book built)
10.4 Part D - Format of billboards and banners 226 Not Present
10.5 Part E - Compliance certificate in respect of news reports 227 Part D - Compliance certificate in respect of news reports
113

(ICDR) 2009
Schedule XI - Format of Report to be submitted by the Schedule IX - Format of Report to be submitted by
11 228
Monitoring Agency Monitoring Agency
12 Schedule XII – Mandatory Collection Centres 231 Schedule III – Mandatory Collection Centres
13 Schedule XIII - Book Building Process 231 Schedule XI - Book Building Process
13.1 Part A – Book building process 231 Part A
13.1.1 Lead Manager(s) 231 Part A – Lead Book Runner
13.1.2 Syndicate Member(s) 231 Part A – Syndicate Members
13.1.3 Underwriting 231 Part A – Underwriting
13.1.4 Agreement with the stock exchanges 231 Part A – Agreement with the stock exchange
Part A – Appointment of stock brokers as bidding/collection

13.1.5 Appointment of stock brokers as bidding/collection centres 232
centres
Part A – Price not to be disclosed in the draft red herring

13.1.6 Price not to be disclosed in the draft red herring prospectus 232
prospectus
13.1.7 Floor price and price band 232 Part A – Floor Price and Price Band
The manner and contents of Application-cum-Bidding Form

The manner and contents of the bid-cum-application form
and Revision Application-cum-Bidding Form (accompanied
13.1.8 and revision form (accompanied with abridged prospectus) 233
with abridged prospectus) shall be as specified by the Board
shall be as specified by the Board
through Circular.]
13.1.9 Extension of issue period 233 Part A – Floor Price and Price Band
13.1.10 Anchor Investors 233 Part A – Anchor investors
13.1.11 Margin money 235 Part A – Margin Money
13.1.12 Bidding process 235 Part A – Bidding process
114

(ICDR) 2009
13.1.13 Determination of price 236 Part A – Determination of price
Part A – Registering of prospectus with the Registrar of

13.1.14 Registering of prospectus with the Registrar of Companies 236
Companies
13.1.15 Manner of allotment/ allocation 236 Part A – Manner of Allotment/ Allocation
13.1.16 Maintenance of records 236 Part A – Maintenance of Books and Records
13.1.17 Applicability to Fast Track Issues 236 Part A – Applicability to fast track issues
13.2 Part B - Format of bid data displayed on stock exchange 236 Part B - Format of bid data displayed on stock exchange
13.2.1 Details of Allocation to the Anchor Investors 236 Part B – Details of Allocation to the Anchor Investors
Details of Allocation to Investors other than Anchor Details of Allocation to Investors Part B – other than Anchor
13.2.2 237
Investors Investors
Part C - Illustration regarding allotment to qualified Part C - Illustration regarding allotment to qualified
13.3 237
institutional buyers other than anchor investors institutional buyers other than anchor investors
13.3.1 Issue Details 237 Part C - Issue Details
13.3.2 Details of QIB Bids 238 Part C - Details of QIB Bids
13.3.3 Details of Allotment to QIB Bidders/Applicants 238 Part C - Details of Allotment to QIB Bidders/Applicants
13.4 Part D - Alternate method of book building 239 Part D - Alternate method of book building
Schedule XIV - Illustration explaining the procedure of Schedule XV - Illustration explaining procedure of
14 240
Allotment Allotment
Schedule XV – A. - Illustration explaining procedure of

14.1 Part A - Illustration explaining the procedure of allotment 240
allotment
14.2 Part B - Illustration explaining minimum application size 242 Schedule XIV - Illustration explaining minimum
115

(ICDR) 2009
application size
15 Schedule XV - Format of Report for Green Shoe Option 242 Schedule XII - Format of Report for Green Shoe Option
Schedule XVI - Nature of updation/changes in the Offer

Schedule XVI - Nature of changes in the Offer
16 243 Document and consequent steps therein requiring filing
Document requiring filing of updated Offer Document
of updated Offer Document
Changes which require fresh filing of the draft offer Changes which require fresh filing of the draft offer
16.1 243
document with the Board, along with fees document with the Board, along with fees
Changes which require filing of the updated offer document Changes which require filing of the updated offer document
16.2 243
with the Board, along with fees with the Board, along with fees
Changes which require filing of the updated offer document Changes which require filing of the updated offer document
16.3 244
with the Board, without fees with the Board, without fees
17 Schedule XVII - Formats of Post-Issue Reports 244 Schedule XVI - Formats of Post-Issue Reports
17.1 Part A - Format of final post-issue report for a public issue 244 Part C - Format of final post-issue report for a public issue
17.1.1 In case of a subscribed Issue 244 Part C - In case of subscribed Issue
17.1.2 In case of under subscribed Issue 245 Part C - In case of under subscribed Issue
17.2 Part B - Format of initial post-issue report for a rights issue 246 Part B - Format of initial post-issue report for a rights issue
17.3 Part C - Format of final post-issue report for a rights issue 247 Part D - Format of final post-issue report for a rights issue
17.3.1 In case of a subscribed Issue 247 Part D - In case of subscribed Issue
17.3.2 In case of under-subscribed Issue 248 Part D - In case of under subscribed Issue
Schedule XVIII - Format of Underwriting Devolvement Schedule XVIII - Format of Underwriting Devolvement
18 249
Statement Statement
19 Schedule XIX - Listing of Securities on Stock Exchanges 249 Chapter XI - Listing of Securities on Stock Exchanges
116

(ICDR) 2009
Schedule XX - Conditions/ manner of providing exit Chapter VI-A – Conditions and manner of providing exit
20 250
opportunity to Dissenting Shareholders opportunity to Dissenting Shareholders
117
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
Outstanding for Capital Markets
AsiaLaw Profiles, 2018, 2017 & 2016
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
Law Firm of the Year – Capital Markets
Asia-Mena Counsel, 2017
118
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RSG Top 40 Indian Law Firms Ranking, 2017
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AZB & Partners Privileged and confidential

November 2018 AZB Capital Markets Update

SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND

INTRODUCTION AND SCOPE

(a) Section I – A snap-shot of the key structural and global changes;

Glossary of key terms:

(a) AIF – Alternative investment fund

SECTION I – A SNAP-SHOT OF KEY STRUCTURAL AND GLOBAL CHANGES

 Provisions pertaining to IPP have been deleted from ICDR 2018.

SECTION II – KEY REGULATORY CHANGES (PUBLIC ISSUANCES ON THE MAIN BOARD)

PART A – KEY AMENDMENTS TO DEFINITIONS AND CONCEPTS

1. APPLICABILITY OF THE ICDR 2018

(a) Key changes

(a) Key changes

 New definition included in ICDR 2018.

(b) Key points to be noted

(a) Key changes

 Requirement of employees being ‘full-time’ has been deleted.

(b) Key points to be noted

(a) Key changes

fugitive economic offenders.

 This eligibility requirements extend only to directors or promoters of the issuer.

(b) Key points to be noted

5. GROUP COMPANIES (IDENTIFICATION AND LITIGATION APPROACH)

(a) Key take away

 Promoters and subsidiaries have been excluded from the definition.

(b) Key points to be noted

(a) Key changes

(a) Key changes

(b) Key points to be noted

(a) Key changes

(b) Key points to be noted

9. QUALIFIED INSTITUTIONS PLACEMENT

(a) Key changes

(b) Key points to be noted

10. SELLING SHAREHOLDERS

(a) Key changes

(b) Key points to be noted

 Vis-à-vis confirmation under the SBO Rules

PART – B – KEY PROCEDURAL AMENDMENTS

1. ELIGIBILITY FOR PUBLIC ISSUES ON THE MAIN BOARD

(a) Key changes

 Eligibility requirements for promoters, directors and selling shareholders:

 Convertibles linked eligibility:

 Financial information linked eligibility:

 OFS linked eligibility:

 General conditions of eligibility:

2. Minimum promoters’ contribution, its eligibility, pledging and certification

(a) Key changes

(b) Key points to be noted

3. Face value of equity shares

(a) Key changes

4. Price and price band

(a) Key changes

(b) Key points to be noted

(a) Key changes

(b) Key points to be noted

 Underwriting obligation only to ensure that the IPO is not a failure.

6. Reservation on competitive basis

(a) Key changes

(b) Key points to be noted

7. Minimum subscription – Timeline for refund and interest

(a) Key changes: