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Informist, Wednesday, Sept. 10, 2025

MUMBAI – The Securities Exchange Board of India has amended the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations to include the recognition of accredited investors under the SEBI (Alternative Investment Funds) Regulations, 2012, for investment in angel funds. These changes came into effect on Monday. 

Provisions relating to dematerialisation were also tightened, with the provision requiring demat form before filing a draft offer document. This now includes securities held by promoters, promoter groups, directors, key managerial personnel, senior management, qualified institutional buyers, employees, superior rights equity shareholders, financial sector regulators, and other categories as may be specified by SEBI. The definition of "employee" and "financial sector regulator" has also been clarified in the amendment.

Further, the amendment introduced regulations dealing with the offer for sale of shares arising out of conversion of fully paid-up compulsorily convertible securities acquired under schemes approved by courts or government authorities, bringing uniformity with the Companies Act, 2013 provisions. These shares should be in lieu of business and invested capital, which had been in existence for a period of more than one year prior to approval of such schemes.

The amendment also broadened the eligibility of entities such as alternative investment funds, foreign venture capital investors, scheduled commercial banks, public financial institutions, insurance companies, and certain non-individual public shareholders holding at least 5% stake, to contribute toward minimum promoters' contribution.

Amendments to provisions governing Social Stock Exchanges were also introduced. These include insertion of new clauses related to social enterprises, recognition of charitable societies and trusts under the Registration Act, 1908, and refined criteria for social impact assesment organisations. The regulations also mandate that not-for-profit organisations must list at least one project within two years of registration on the Social Stock Exchanges to continue their registration.

The amendment also mandated more comprehensive risk disclosures, clearer presentation of capitalisation statements. Capitalisation Statement should include total borrowings, total equity, and the borrowing or equity ratios before and after the issue is made.  End

Reported by Srijita Bose

Edited by Akul Nishant Akhoury

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