The Lead Merchant Banker shall ensure compliance with the following:

1. An unlisted company making a public issue of NCDS may, subject to other applicable provisions of these guidelines, make a public issue and make an application for listing its NCDS in the Stock Exchange/s without making a prior public issue of equity and listing thereof, if the following conditions are fulfilled:

   1. The NCDS shall carry a credit rating not below investment grade at-least from one Credit Rating Agency registered with the Board. Where the issue size of the NCDS is Rs. 100 crores or more, such rating shall be obtained from at least two Credit Rating Agencies.

   2. A contribution of atleast 20% of the project cost i.e., objects proposed to be inter alia, financed through the issue, shall be brought in the form of equity. Such equity participation may be brought by the promoter from his own funds or from other sources, subject to the condition that at least 20% of the issue size is brought by way of equity by the promoter from his own funds. In case, the project is to be implemented in stages, the promoters contribution as per these requirements shall be with respect to total equity participation till the respective stage vis a vis the debt raised or proposed to be raised through the issue

   3. The issuer company shall agree to comply with the requirements of continuing disclosures as specified under the listing agreement to be entered into with concerned stock exchanges as is applicable for listing of equity shares.

   4. The issuer company shall agree to obtain prior consent of the holders of the NCDS through special resolution to be passed at the general meeting of the NCDS holders for change in terms of issue, change in capital structure and change in shareholding pattern.

   5. There shall be no partly paid up shares/other securities at the time of filing of draft offer document with the Board.

   6. The issuer company may come out with a public issue of equity/security convertible into equity after allotment during the currency of the NCDS or thereafter, only after complying with the guidelines applicable for an initial public offering of such securities.

   7. The equity held by the promoters or others at the time of issue of NCDS may be listed only when an initial public offer of equity/securities convertible into equity after allotment is made after complying with the applicable provisions of these Guidelines.

2. A Municipal Corporation which has no share capital may be subject to the provisions of sub-clauses (a), (b) and (c) of Clause 8.2.1, make a public issue of NCDS and list the same on the stock exchange/s.)

3. An unlisted company making a public issue of DSCE may, subject to other applicable provisions of these guidelines make a public issue and make an application for listing on the stock exchanges without making a prior public issue of its equity and listing thereof, if the following conditions are fulfilled:

   1. The provisions of clauses (a) to (e) of clause 8.2.1 shall be mutatis mutandis complied with.

   2. An issuer company making an initial public offer of DSCE may come out with a subsequent public issue of equity/security convertible into equity after allotment during the currency of the DSCE only after complying with the guidelines applicable for an initial public offering of such securities.

      Provided that the provisions of Clause 2.6 shall not be applicable for an Initial Public Offer of such securities if the floor price for conversion of DSCE is determined and disclosed in the offer document for issue of DSCE.

   3. The equity held by the promoters and others may be listed along with the listing of equity in initial public offering of equity/security convertible into equity after allotment or at the time of listing if equity arising on conversion of the DSCE .

   4. If the equity shares held by the promoters is proposed to be listed on conversion of DSCE, it shall be ensured that the number of equity shares allotted to the public (after excluding the allotment of equity shares to holders of DSCE issued on firm allotment/reservation basis) as a percentage of the total paid up equity capital after conversion and listing of the promoters equity, is not less than the percentage specified in clause (b) of sub-rule (2) of Rule 19 of Securities Contracts (Regulations) Rules, 1957.

4. The lead merchant banker can mention a price band of 20% (cap in the coupon rate/ price band should not be more than 20% of the floor coupon rate/price) in the offer document filed with the Board and the specific coupon rate/price can be determined by an issuer in consultation with the lead manager at a later date before filing of the offer document with the RoC/s.

5. The issuer may subject to the provisions of Chapter XI of these guidelines, make the issue through book building process to ascertain and determine the coupon rate and price/ conversion price of the NCDS/DSCE.

Rule 19(2)(b) of SC (R) Rules, 1957

1. In case of a public issue by an unlisted company, the net offer to public shall be at least 10% or 25% as the case may be, of the post-issue capital.

2. In case of a public issue by a listed company, the net offer to public shall be at least 10% or 25%, as the case may be, of the issue size<./LI>

3. An infrastructure company, satisfying the requirements in Clause 2.4.1 (iii) of Chapter II, inviting subscription from public 85 (shall not attract the provisions of Clauses 8.3.1 and 8.3.2 above)

4. The issuer company is free to make reservations and/or firm allotments to various categories of persons mentioned hereafter for the remaining of the issue size subject to other relevant provisions of these guidelines.(Clause 8.3.4)

Explanation

1. The expression "reservation" shall mean reservation on Competitive Basis wherein allotment of shares is made in proportion to the shares applied for by the concerned reserved categories.

2. Reservation on competitive basis can be made in a public issue to the following categories:

Specified Categories for "Firm allotment" in public issues can be made to the following :

4. The Lead Merchant Banker(s) can be included in the category of persons entitled to firm allotments subject, to an aggregate maximum ceiling of 5% of the proposed issue of securities.

5. The aggregate of reservations and firm allotments for employees in an issue, shall not exceed 10% of the total proposed issue amount.

6. For shareholders, the reservation, shall not exceed 10% of the total proposed issue amount.

7. In case of promoting companies are Designated Financial Institutions/ State and central financial Institutions, the employees and the shareholders of such promoting companies, shall not be eligible for the said reservations.

8. The allotment of securities to the specified categories for firm allotment/ reservation shall be subject to such conditions as may be specified by the Government and regulatory authorities.

1. An unlisted company may make an application to the Board for relaxation from applicability of clause (b) to sub-rule (2) of Rule 19 of the Securities Contracts (Regulation) Rules, 1957 for listing of its shares without making an initial public offer if it satisfies the following conditions
   (Clause 8.3.5.1)

   1. Shares have been allotted by the unlisted company (transferee company) to the holders of securities of a listed company (transferor company) pursuant to a scheme of reconstruction or amalgamation under the provision of the Companies Act, 1956 and such scheme has been sanctioned by the High Court/s of the Judicature.

   2. The listing of the shares of the unlisted transferee company is in terms of scheme of arrangement sanctioned by the High Court/s of the Judicature.

   3. Atleast 25% of the paid up share capital, post scheme, of the unlisted transferee company seeking listing comprises shares allotted to the public holders of shares in the listed transferor company.

   4. The unlisted company has not issued/reissued any shares, not covered under the scheme.

   5. There are no outstanding warrants/instruments/agreements which gives right to any person to take the shares in the unlisted transferee company at any future date. If there are such instruments in the scheme sanctioned by the Court, the percentage referred to in point (iii) above, shall be computed after giving effect to the consequent increase of capital on account of compulsory conversions outstanding as well as on the assumption that the options outstanding, if any, to subscribe for additional capital will be exercised

   6. The share certificates have been despatched to the allottees pursuant to the scheme of arrangement or their names have been entered as beneficial owner in the records of the depositaries.

   7. That the shares of the transferee company issued in lieu of the locked-in shares of the transferor company are subjected to the lock-in for the remaining period

   8. In addition to the requirements of Clause (vii) above, the following conditions are also to be complied with:

      1. in case of a hiving off of a division of a listed company (say 'A') and its merger with a newly formed company or existing company (say 'B') there would not be any additional lock-in, if the paid up share capital of company 'B' is only to the extent of requirement for incorporation purposes.

      2. in case of merger where the paid-up share capital of the company seeking listing (company 'B') is more than the requirement for incorporation; the promoters' shares shall be locked in to the extent 20% of the post merger paid-up capital of the unlisted company, for a period of 3 years from the date of listing of the shares of the unlisted company. The balance of the entire pre-merger capital of the unlisted company shall also be locked-in for a period of 3 years from the date of listing of the shares of the unlisted company.

2. An application to the Board under Clause 8.3.5.1 shall be made through the designated stock exchange of the listed company and the designated stock exchange may recommend the application giving the reason therefore.)(Clause 8.3.5.2)

3. The unlisted company shall take steps for listing, simultaneously on all stock exchanges where the shares of the (transferor) listed company are/were listed, within 30 days of the date of the final order of the High Court/s approving the scheme. The formalities for commencing of trading shall be completed within 45 days of the date of final order of the High Court/s. (Clause 8.3.5.3)

4. Before commencement of trading, the company shall give an advertisement in one English and one Hindi newspaper with nationwide circulation and one regional newspaper with wide circulation at the place where the registered office of the company is situated, giving details as specified in schedule XXVIII (clause 8.3.5.4)