CHECKLIST FOR RIGHT ISSUE
(Other than Listed Company)
v RIGHT
ISSUE
Ø An issue of capital to the existing shareholders
of the Company in same proportion to the existing holding through letter of
offer
Ø The offer made to the existing shareholding
is not binding upon them, they can renounce their right in favour of any other
person (whether Member or Not)
v CHECKLIST
Ø CHECK WEATHER ARTICLES AUTHORISE RIGHT
ISSUE:-
If
not, take steps to increase the authorized capital
Ø LETTER OF OFFER:-
Finalize
the draft letter of offer for issuing equity shares through right issue. No
specific format of Letter of offer is prescribed. However letter of offer shall
contain offer price, face value of shares, Mode & terms of payment and
right to renounce
Ø BOARD MEETING:-
Hold
Board Meeting and pass resolution for approval of letter of offer. Notice of BM
to be sent at least 7 days before date of BM.
Ø FILING OF MGT-14:-
File
MGT-14 within 30 days from passing board resolution. (This provision is not applicable to private companies)
Ø DISPATCH LETTER OF OFFER:-
Dispatch
Letter of Offer through registered post, speed post or electronic mode to all
existing shareholders. Letter of Offer to be sent at least three days prior to
opening of issue (Hand delivery of letter of offer is not permissible)
Ø TIME PERIOD OF OPEN OFFER:-
Offer
to be kept open for minimum 15 days upto 30 days.
Provided
that in case of a private company, if ninety percent of members have given
their consent in writing or in electronic mode, the period lesser than those
specified shall apply
Ø DEEMED REFUSAL:-
No Intimation
in 30 days would be deemed to be refusal of the offer.
Ø ANOTHER BOARD MEETING:–
Hold
another Board Meeting to approve issue of shares to shareholders who have opted
for the Right Issue of shares. Notice of BM to be sent at least 7 days before
date of BM
Ø ISSUANCE OF SHARES:–
Issue
shares in accordance with the list of allottees approved in the Board Meeting
Ø FILING OF PAS- 3:-
File
PAS-3 within 30 days from date of allotment – return of allotment
Ø ISSUANCE OF SHARE CERTIFICATES:-
Issue
Share Certificate within 2 months from date of allotment
CHECKLIST FOR RIGHT ISSUE
(Listed Company)
v RIGHT
ISSUE
Ø These Regulations are applicable to a Rights
Issue of a Listed Company, where the aggregate value of specified securities
offered is fifty lakh rupees or more
v CHECKLIST
Ø CHECK WEATHER ARTICLES AUTHORISE RIGHT
ISSUE:-
If
not, take steps to increase the authorized capital
Ø APPOINTMENT OF MERCHANT BANKER AND
OTHER INTERMEDIARIES :
The
issuer shall appoint one or more merchant bankers, at least one of whom shall
be a lead merchant banker and shall also appoint other intermediaries only
those who are registered with SEBI, in consultation with the lead merchant
banker, to carry out the obligations relating to the issue
Ø IN-PRINCIPLE APPROVAL OF STOCK
EXCHANGE:
The
Company must obtain in-principle approval for its Rights Issue from the Stock
Exchanges where the company shares are listed
Ø DOCUMENTS TO BE SUBMITTED BEFORE
OPENING OF THE ISSUE:
The
Lead merchant Banker shall submit the documents mentioned in regulation 8 of
chapter II of along with draft offer document.
Ø FILING OF OFFER DOCUMENT:
File
letter of offer at least 30 days prior to file the same with designated stock
exchanges. If SEBI specifies any change in it then issuer shall carry out such
changes. The offer document filed with the board under this regulation shall
also be furnished to the Board in a soft Copy in the manner specified in
Schedule V.
Ø FORMAT OF LETTER OF OFFER:
Specified
in schedule viii of part A or E specified in regulation 57(2)(b). If a
company complies with conditions mentioned in clause 1 of part E then it has
required making L.O.O. according to Part E
Ø PRE-ISSUE ADVERTISEMENT OF RIGHT
ISSUE:
At
least 3 days before opening of the issue.
Ø ABRIDGE L.O.O TO SHAREHOLDERS:
At
least 3 days before opening of issue.
Ø MINIMUM SUBSCRIPTION:
Minimum
subscription of issue size shall be 90 % of the issue size.
Ø RECORD DATE –
7
working days notice given for record date.
Ø ISSUE OPENING DATE:
As
according to regulation 11 of chapter II
The
Rights Issue must be opened for subscription for a minimum period of 15 days
and Maximum period of 30 days
Ø PRICING:
The
issue price shall be decided before determining the record date which shall be
determined in consultation with the designated stock exchange.
Ø OVER SUBSCRIPTION:
No
part of over subscription of Rights Issue shall be retained by the Listed
Company; the amount has to be refunded
Ø WITHDRAWAL OF THE RIGHTS ISSUE:
No
Rights Issue can be withdrawn by issuer after fixing the Record Date. In
case if it has withdrawn after announcing record date, no further issue of
capital is allowed for a period of 12 months from the record date.
Ø LODR REQUIREMENT:
Intimation to stock exchange: at least 2 days intimation to stock exchange as per regulation 29 of SEBI, LODR Regulations 2015.
