The Securities and Exchange Board of India (SEBI) has announced a new rule aimed at expediting the capital-raising process for companies.
Effective April 7, 2025, the timeline for completing rights issues has been slashed from 126 days to just 23 days. This significant reduction is expected to provide much-needed relief for companies in need of swift capital infusion.
In its circular, SEBI has also introduced greater flexibility in the allotment of shares to specific investors within the rights issue. The subscription period for rights issues has been revised, now ranging from a minimum of seven days to a maximum of thirty days. These changes are part of the amended Regulation 85 and Regulation 87 of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.
The validation of application bids and the finalization of the basis of allotment will be conducted by the Stock Exchanges and Depositories, in collaboration with the Registrar to the issue. The new provisions will apply to rights issues approved by the Board of Directors from April 7, 2025, onward.
In a related development, SEBI’s first board meeting under the leadership of new Chairperson Tuhin Kanta Pandey is set to address several key regulatory proposals. The agenda includes UPI-like protections for demat accounts, ensuring the independence of clearing corporations, expanding the scope of qualified institutional buyers (QIBs), and changes in fee collection by research analysts. These measures are aimed at enhancing investor security and improving the regulatory framework.
