SEBI Regulations 2018 (excerpt)
The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018
158. Provisions of this chapter not to apply in certain cases.
- The provisions of this Chapter shall not apply where the preferential issue of equity shares is made pursuant to:
- conversion of a loan or an option attached to convertible debt instruments in terms of sub-sections (3) and (4) of sections 81 of the Companies Act, 1956 or sub-section (3) and (4) of section 62 of the Companies Act, 2013, whichever is applicable;
- a scheme approved by a High Court under section 391 to 394 of the Companies Act, 1956 or approved by a tribunal or the Central Government under sections 230 to 234 of the Companies Act, 2013, as applicable;
- a qualified institutions placement in accordance with Chapter VI of these regulations.
Provided that the pricing provisions of this Chapter shall apply to the issuance of shares under schemes mentioned in clause (b) in case of allotment of shares only to a select group of shareholders or shareholders of unlisted companies pursuant to such schemes;
- guidelines for determining the conversion price have been specified by the Reserve Bank of India in accordance with which the conversion price shall be determined and which shall be in compliance with the applicable provisions of the Companies Act, 2013;
- conversion price shall be certified by two independent valuers;
- specified securities so allotted shall be locked-in for a period of one year from the date of their allotment
- the lock-in of equity shares allotted pursuant to conversion of convertible securities issued on preferential basis shall be reduced to the extent the convertible securities have already been lockedin;
- the applicable provisions of the Companies Act, 2013 are complied with, including the requirement of a special resolution.
Provided that for the purpose of transferring the control, the lenders may transfer the specified securities allotted to them before completion of the lock-in period subject to continuation of the lock-in on such securities for the remaining period, with the transferee;
Explanation. - For the purpose of this sub-regulation, "lenders" shall mean all scheduled commercial banks (excluding Regional Rural Banks) and All India Financial Institutions.