Planning for an IPO is like conducting a symphony – it has several facets, each intrinsically linked to the other. In addition to other laws applicable to specific elements, in India, the key regulations which cover or prescribe requirement in relation to preparation of financial information are:
- The SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (the SEBI ICDR Regulations)
- SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 (the Listing Regulations)
- The Companies Act, 2013 (2013 Act).
The above mentioned regulations are vast and complex.
Once an entity is listed on a stock exchange, it continuously needs to adhere to the Listing Regulations and the 2013 Act.
Therefore, this publication includes two components:
- SEBI ICDR Regulations checklist (Revised February 2018)
- SEBI Listing Regulations checklist (Revised February 2018).
About the SEBI ICDR and Listing Regulations checklists (the Checklists)
The SEBI ICDR Regulations lay down guidelines relating to conditions for various kinds of issues including public and rights issue.
The ICDR Regulations provide detailed provisions relating to public issue such as conditions relating to an IPO and Further Public Offer (FPO), conditions relating to pricing in public offerings, conditions governing promoter’s contribution, restriction on transferability of promoter’s contribution, minimum offer to public, reservations, manner of disclosures in offer documents, etc.
The SEBI Listing Regulations lay down the broad principles for periodic disclosures to be given by the listed entities operating in different segments of the capital markets.
KPMG in India has compiled the requirements of SEBI ICDR Regulations and the Listing Regulations in relation to an IPO, FPO and rights issue in the form of a checklist.
Further, the checklists include key guidance issued by the Institute of Chartered Accountants of India (ICAI) in its Guidance Note on Reports in Company Prospectuses (Revised 2016).
These checklists are expected to assist companies preparing for an IPO, FPO and rights issue and post listing requirements by bringing under one roof important provisions of ICDR Regulations and the Listing Regulations.
Therefore, these checklists are relevant for following two phases:
- The IPO phase which covers vital conditions to be kept in mind for a public issue and rights issue (including warrants), and
- The post IPO phase which covers common obligations and disclosure requirements for listed entities (including both equity and debt securities).
These checklists are organised by chapter-wise comprising relevant regulations.
Each chapter is divided into the following sections:
- Executive summary
These checklists have been revised and are based on the ICDR Regulations and the Listing Regulations issued by SEBI including all amendments up to 15 February 2018.
Need for judgement
These checklists have been prepared to assist companies in complying with the significant requirements of the SEBI ICDR Regulations and the Listing Regulations.
However, the preparation for an IPO and providing disclosures post listing of securities is likely to entail the use of judgement in terms of the evaluation of the relevant provisions of applicable laws and regulations based on the entity’s specific circumstances and the materiality of disclosures in the context of the organisation.
02 Intro To Stocks - Journey From Startup To IPO
Therefore, users are cautioned to use these checklists in conjunction with the actual text of the SEBI ICDR and Listing Regulations and to consult their professional advisors before concluding on disclosure requirements for their own transactions.