SEBI Tweaks ICDR Norms, Underwriting Agreement now a Pre-requisite for IPO Filings

Notification No. SEBI/LAD-NRO/GN/2023/130, Dated 23.05.2023

The SEBI has notified amendment in Regulation 40 and 136 of SEBI (ICDR) Regulations, 2018. Earlier, if the issuer was intending to make an IPO, other than through the book building process, and wishes to have the issue underwritten, it was required to appoint underwriters in compliance with SEBI (Underwriters) Regulations, 1993.

Now, as per the amended norms, issuer shall, prior to the filing of the prospectus, enter into an underwriting agreement with the merchant bankers or stock brokers registered with the Board to act as underwriters.

As per the amended norms, the Underwriting Agreement shall contain the maximum number of specified securities they shall subscribe to, either by themselves or by procuring subscription, at a predetermined price which shall not be less than the issue price, and shall disclose the fact of such underwriting agreement in the prospectus.

Further, the SEBI has also notified amendment in 10(A) of Part-A and 11(A) of Part-B-1 of Schedule VI of the ICDR Regulations. Schedule VI speaks about the Disclosures in the Offer Document, Abridged Prospectus and Abridged Letter of Offer.

Earlier, Schedule A only provided requirement to disclosure the Industry Overview. Now, as per the amended norms, if extract of any industry report is disclosed in the offer document, the complete industry report shall be provided as part of the material documents.

Further, the SEBI has notified amendment in clause 18(3) in Part A and clause 22(B) in Part B-1 of Schedule VI of the ICDR Regulations. Earlier, material contracts and material document were available for inspection.

Now, the SEBI has provided that the material contracts and material documents shall also be made available for inspection through online means.

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