IPO: SEBI extends lock-in period to 90 days for anchor investors

SEBI said the existing lock-in of 30 days would continue for 50% of the allotted share to anchor investors and for the remaining portion, the lock-in of 90 days from the date of allotment would be applicable for all issues opened on or after 01.01. Will happen. April, 2022.

For promoters, the lock-in requirement should be reduced to 18 months from the existing 3 years for allocation of up to 20% of the post issue paid-up capital. The lock-in requirement should be reduced to 6 months from the existing 1 year for allocation of more than 20% of the post issue paid-up capital.

For non-promoters, the lock-in requirement for allotment will be reduced from 1 year to 6 months, SEBI said in a statement.

The lock-in period is a time limit during which investors investing in a public issue cannot sell their allotted shares. However, once the lock-in period is over, investors are free to sell their investments.

In case of book built issue, the minimum price band of 105% of the minimum price shall be applicable for all issues opened on or after notification in the Official Gazette.

SEBI has also decided to allow pledge of shares allotted to promoter or promoter group under preferential issue during the lock-in period.

SEBI asked to fix the minimum price for a frequently traded security such that the minimum price for the preferential issue should exceed the volume-weighted average price (VWAP) of 90/10 trading days of the share prior to the relevant date needed.

For low-traded securities, SEBI said valuation report by a registered independent valuer would be required.

Presently, the pricing formula in the preferential allotment is the VWAP of the last two weeks or the last 26 weeks, whichever is higher.

SEBI has said that any preference issue resulting in change of control or allotment of more than 5 per cent stake would require a valuation report from a registered valuer.

In addition, any change of control resulting from the allocation of a preferential issue would require a committee of independent directors to provide a reasoned recommendation along with their comments on all aspects of preferential issuance, including pricing.

(with inputs from agencies)