Corporate Actions

Corporate Actions

Corporate Actions

Corporate Actions includes activities that bring material change to an organization and impact its stakeholders, including shareholders, both common and preferred, as well as bondholders. These events are generally approved by the company’s board of directors; shareholders may be permitted to vote on some events as well. Some corporate actions require shareholders to submit a response.

Our Offerings

Buyback- Open market & Tender offer

Right Issue

Bonus issue

Stocks Split

Preferential allotment of equity, shares & warrants

Listing perusing to M&A under regulation 19 2(b) of SCRA act

Delisting- Reverse book-building & Small company

FAQ

Buyback refers to the practice of a company buying back its own shares from the market. It can opt for an open market route where the shares are purchased from the secondary markets, or a tender offer route wherein shareholders can tender their shares in the offer.

Eligibility requirements for Buyback-Open market & Tender offer:

A company may buy back its shares or other specified securities from its existing securities holders on a proportionate basis in accordance with the provisions of this Chapter: Provided that fifteen percent of the number of securities which the company proposes to buyback or number of securities entitled as per their Shareholding, whichever is higher, shall be reserved for small shareholders.

A rights issue is an invitation to existing shareholders to purchase additional new shares in the company at a discounted price on a stated future date. We carry out the required prerequisites for the same.

General conditions for Right Issue:

The issuer making a rights issue of specified securities shall ensure that:
  • it has made an application to one or more stock exchanges to seek an in-principle approval for listing of its specified securities on such stock exchanges and has chosen one of them as the designated stock exchange, in terms of Schedule XIX.
  • all its existing partly paid-up equity shares have either been fully paid-up or have been forfeited;
  • it has made firm arrangements of finance through verifiable means towards seventy five per cent. of the stated means of finance for the specific project proposed to be funded from issue proceeds, excluding the amount to be raised through the proposed rights issue or through existing identifiable internal accruals.

The amount for general corporate purposes, as mentioned in objects of the issue in the draft letter of offer and the letter of offer, shall not exceed twenty five per cent. of the amount raised by the issuer.

Where the issuer or any of its promoters or directors is a wilful defaulter, the promoters or promoter group of the issuer shall not renounce their rights except to the extent of renunciation within the promoter group.

A bonus issue, also known as a capitalization issue, is an offer of free additional shares to existing shareholders. It is done to encourage retail participation and convert surplus profits into shares.



Eligibility requirements for Bonus Issue:

  • Subject to the provisions of the Companies Act, 2013 or any other applicable law, a listed issuer shall be eligible to issue bonus shares to its members if:
  • it is authorised by its articles of association for issue of bonus shares, capitalisation of reserves, etc.:

    • Provided that if there is no such provision in the articles of association, the issuer shall pass a resolution at its general body meeting making provisions in the articles of associations for capitalisation of reserve;


  • it has not defaulted in payment of interest or principal in respect of fixed deposits or debt securities issued by it;
  • it has not defaulted in respect of the payment of statutory dues of the employees such as contribution to provident fund, gratuity and bonus;
  • any outstanding partly paid shares on the date of the allotment of the bonus shares, are made fully paid-up;
  • Shareholding Condition.
  • any of its promoters or directors is not a fugitive economic offender.


Equity shares of a company may be delisted from all the recognised stock exchanges where they are listed, without following the procedure in Chapter IV of these regulations, if, –

NSE
  • Post issue paid up capital (face value) up to Rs.25 crore.
  • Track record of at least 3 years.
  • Positive net worth
  • Annual Revenue: Not less than 10 Crores
  • Annual Growth: 20% (Number of Users/Revenue Growth/Customer base).
  • Shareholding Condition.
  • At least 10 % Pre – Issue Capital as on the date of filing of draft offer document held by:
  • A member of the angel investor network or Private Equity Firms Such angel investor network or Private Equity should have had an investment in the startup ecosystem Investment in 25 or more startups and aggregate investment is more than 50 crores.
BSE
  • The Company shall be incorporated under the Companies Act, 1956 / 2013. The company should be registered as start-up with DPIIT. In case the company is not registered as Start-up with DPIIT then the company’s paid-up capital should be minimum Rs. 1 crore.
  • The company or the partnership / proprietorship / LLP firm or the firm which have been converted into the company should have a combined track record of at least 2 years at the time of filing the prospectus with BSE
  • The post issue paid up capital of the company (face value) shall not be more than Rs. 25 crores.
  • There should be preferably investment by QIB investors (as defined under SEBI ICDR Regulations, 2009)/Angel Investors/Accredited Investors for a minimum period of 2 years at the time of filing of draft prospectus with BSE.
  • The Company should not have been referred to National Company Law Tribunal (NCLT) under Insolvency and Bankruptcy Code, 2016.
  • There should be no winding up petition against the company that has been accepted by the National Company Law Tribunal (NCLT). None of the Promoter / directors of the company have been debarred by any regulatory agencies.

Qualified Institutional Placement allows an Indian-listed company to raise capital from domestic markets without having to submit any pre-issue filings or legal paperwork to the market regulators. Through QIP, capital can be raised within a short span of time. QIP’s are both time and cost-efficient as the legal work and regulations are relatively low, thus making it easier for an already listed company to raise capital from the market.



Eligibility requirements for QIP’s:

a) a special resolution approving the qualified institutions placement has been passed by its shareholders, and the special resolution shall, among other relevant matters, specify that the allotment is proposed to be made through qualified institutions placement and the relevant date referred to in sub-clause (ii) of clause (b) of regulation 171; Provided that no shareholders’ resolution will be required in case the qualified institutions placement is through an offer for sale by promoters or promoter group for compliance with minimum public shareholding requirements specified in the Securities Contracts (Regulation) Rules, 1957; Provided further that allotment pursuant to the special resolution referred to in this clause (a) of regulation 172 shall be completed within a period of 365 days from the date of passing of the resolution.

b) the equity shares of the same class, which are proposed to be allotted through qualified institutions placement or pursuant to conversion or exchange of eligible securities offered through qualified institutions placement, have been listed on a stock exchange for a period of at least one year prior to the date of issuance of notice to its shareholders for convening the meeting to pass the special resolution: Provided that where an issuer, being a transferee company in a scheme of compromise, arrangement and amalgamation sanctioned by a High Court under sections 391-394 of the Companies Act, 1956 or approved by a tribunal or the Central Government under sections 230 to 234 of the Companies Act, 2013, whichever is applicable makes qualified institutions placement, the period for which the equity shares of the same class of the transferor company were listed on a stock exchange having nation-wide trading terminals shall also be considered for the purpose of computation of the period of one year. Provided further that this clause shall not be applicable to an issuer proposing to undertake qualified institutional placement for complying with the minimum public shareholding requirements specified in the Securities Contracts (Regulation) 1957.

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.

d) All eligible securities issued through a qualified institutions placement shall be listed on the recognised stock exchange where the equity shares of the issuer are listed.

Provided that the issuer shall seek approval under rule 19(7) of the Securities Contracts (Regulation) Rules, 1957, if applicable.

e) The issuer shall not make any subsequent qualified institutions placement until the expiry of six months from the date of the prior qualified institutions placement made pursuant to one or more special resolutions.

Follow-on public offering (FPO) refers to the shares issued by an already listed company. These are the additional shares issued by the company after an initial public offering (IPO). They are also known as secondary offerings as they follow an IPO. They could be of 2 main types – Dilutive (New shares are added) and non-dilutive. In Non- dilutive FPO, the existing private shares are sold publicly. We guide and facilitate firms with Follow on public Offers at every possible stage.



Eligibility requirements for FPO’s:

Only such fully paid-up equity shares may be offered for sale to the public, which have been held by the sellers for a period of at least one year prior to the filing of the draft offer document: Provided that in case the equity shares received on conversion or exchange of fully paid-up compulsorily convertible securities including depository receipts are being offered for sale, the holding period of such convertible securities, including depository receipts, as well as that of resultant equity shares together shall be considered for the purpose of calculation of one year period referred in this sub-regulation. Provided further that such holding period of one year shall be required to be complied with at the time of filing of the draft offer document.

Companies issue fixed income instruments to buyers in the form of non-convertible debentures. They are issued by companies to raise long-term capital. NCDs can be issued via a private placement mechanism or a public issue. Nowadays, the private placement mechanism is extensively used for raising funds through NCDs. Most private, public and non-banking financial companies opt for the route of the private placement for issuance of NCDs.



Eligibility requirements for NCD’s:

Only such fully paid-up equity shares may be offered for sale to the public, which have been held by the sellers for a period of at least one year prior to the filing of the draft offer document: Provided that in case the equity shares received on conversion or exchange of fully paid-up compulsorily convertible securities including depository receipts are being offered for sale, the holding period of such convertible securities, including depository receipts, as well as that of resultant equity shares together shall be considered for the purpose of calculation of one year period referred in this sub-regulation. Provided further that such holding period of one year shall be required to be complied with at the time of filing of the draft offer document.


1. No issuer shall make an issue ofnon-convertible securities if as on the date of filing of draft offer document or offer document:
  1. A) The issuer, any of its promoters, promoter groupor directors are debarred from accessing the securities market or dealing in securities by the Board.
  2. B) Any of the promoters or directors of the issuer is a promoter or director of another company which is debarred from accessing the securities marketor dealing in securities by the Board
  3. C)The issuer or any of its promoters or directors is a wilful defaulter
  4. D)Any of the promoters or whole time directors of the issuer is a promoter or whole time director of another company which is a wilful defaulter
  5. E)Any of its promoters or directors is a fugitive economic offender Or
  6. F) Any fine or penalties levied by the Board/Stock Exchanges is pending to be paid by the issuer at the time of filing the offer document: Provided that the:
    • restrictions mentioned at (b) and (d) above shall not be applicable in case of a person who was appointed as a director only by virtue of nomination by a debenture trustee in other company.
    • restrictions mentioned in (a) and (b) above shall not be applicable if the period of debarment is over as on date of filing of the draft offer document with the Board.
    • restrictions mentioned at (c) and (d) shall not be applicable in case of private placement of non-convertible securities.

2. No issuer shall make a public issue of non-convertible securities if as on the date of filing of draft offer document or offer document the issuer is in default of payment of interest or repayment of principal amount in respect of non -convertible securities, if any, for a period of more than six months.

Migration of listed companies to mainboard means to transfer its listed securities on main board of stock exchanges from other platforms like SME Exchange. Companies listed on the SME exchange need to have a market capitalization of at least Rs 25 crore in order to move up to the mainboard. We guide companies with the legal framework and execution of the same.



Eligibility requirements for Migration of Mainboard IPO:

An issuer that has listed its specified securities on a recognized stock exchange may at its option migrate to the main board of that recogniszed stock exchange as per the following criteria subject to compliance with the eligibility requirements of the stock exchange.


  1. 1) The company should have been listed on the IGP for a minimum period of one year;
  2. 2) At the time of making the application for trading under regular category of main board, the number of shareholders should be minimum 200;
  3. 3)The company should have profitability/ net worth track record of 3 years or have 75% of its capital as on the date of application for migration held by Qualified Institutional Buyers in accordance with Regulation 6(1) and 6(2) of the ICDR Regulations for main board listings.
  4. 4)Minimum promoter’s contribution shall be 20% which shall be locked in for 3 years. Period of earlier lock-in of 6 months served at the time of listing on IGP shall be deducted from the stipulated lock-in requirement of 3 years.

A takeover occurs when one company makes a successful bid to assume control of or acquire another. Takeovers can be done by purchasing a majority stake in the target firm. Takeovers are also commonly done through the merger and acquisition process. In a takeover, the company making the bid is the acquirer and the company it wishes to take control of is called the target.

BSE has launched a Dissemination Board mechanism on BSE India website (www.bseindia.com) enabling dissemination of bids/Offer placed by buyers and sellers of securities of companies that are listed exclusively on exiting or de-recognised RSEs using the services of the Trading Members of BSE.

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