Faster Rights Issue Introduced, Allotment Flexibility For Specific Investors

Mumbai: The Securities and Exchange Board of India (SEBI) has introduced a new framework aimed at expediting the Rights Issue process while allowing flexibility in allotment to specific investors. As per circular No. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2025/31, issued on March 11, 2025, amendments to Regulation 85 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (SEBI ICDR Regulations) have been implemented.

Faster Completion Timeline

Under the revised framework, Rights Issues must be completed within 23 working days from the date of approval by the issuer’s Board of Directors. This marks a significant reduction in the timeline, aiming to enhance efficiency in capital raising for listed companies.

Effective Date and Compliance

The new provisions will come into force on April 7, 2025, and will apply to all Rights Issues approved by the Board of Directors from this date onward. All listed companies are required to take note of these changes and comply with the updated regulatory framework.

Regulatory Intent and Impact

SEBI's move is expected to streamline the capital-raising process, improve liquidity, and offer issuers greater flexibility in structuring Rights Issues. Additionally, the provision for allotment to specific investors provides companies with an opportunity to bring in strategic stakeholders while adhering to regulatory safeguards.

A copy of the circular has been attached for reference, and listed entities are urged to align their compliance mechanisms accordingly.

For further details, market participants can refer to SEBI’s official communication.