According to the official announcement, with the aim of facilitating ease of doing business for companies involved in Initial Public Offerings (IPOs) or raising capital, the Securities and Exchange Board of India (SEBI) has approved significant amendments to its regulations.

As per the new changes, in order to streamline the process for companies interested in raising funds through IPOs, the requirement of a 1% security deposit for public/rights issue of equity shares has been eliminated.

Furthermore, entities within promoter groups and non-individual shareholders who hold more than 5% of the post-offer equity share capital will now be allowed to contribute to the minimum promoter contribution (MPC) without being identified as promoters.

To simplify the process for companies utilizing convertible securities for raising funds, it will now be considered to fulfill the MPC requirement on equity shares generated from the conversion of convertible securities for a period of one year before filing the Draft Red Herring Prospectus (DRHP).

This simplifies the process of adjusting the size of the offer for sale (OFS) for amendment sales. Now, the increase or decrease in the size of OFS requiring new filings will be based on only one criterion, either the amount in rupees or the number of shares, as indicated in the draft offer document.

In cases of unexpected events, companies have been given an exemption to extend the bid/closure date. Instead of extending the minimum three-day extension from the previous order, companies will now have the flexibility to extend the closure date by a minimum of one day, providing them with more agility in unforeseen circumstances.

These amendments aim to streamline regulatory frameworks governing IPOs and fundraising activities, with the goal of making the capital markets even more conducive for companies, thereby enhancing their access to capital.