Right issue
neeti goel
Dipak singh
1 Check whether the right issue is within the authorised share capital
of the company.
2 In case listed company ensure to notify the stock exchange concerned
the date of board meeting at which the right issue is proposed to be
considered at least 2 days in advance
3 ensure to keep the right issue open for at least 30 days and not
more that 60 days
4 ensure to convene the meeting and place before it proposal for right
issue
5 Ensure that the board should decide on the following matters:
i Quantum of issue and the proportion of right shares
ii Alteration of share capital if necessary and offering the shares to
person other than the existing holders of shares
iii fixation of record date
iv Appointment of merchant bankers and underwriters
v approval of draft letter of offer or authorisation of Managing
director/ CS to finalise the letter of offer in consultation with
managers to the issue ,the stock exchange and SEBI. The letter of
offer should confirm to the disclosure prescribed in Form 2A
6 After th BM inform the stock exchage about the particulars of
decision
7 Ensure forward Six sets of letter of offer to concerned stock
exchange
8 Advertisement giving date completion of dispatch of LOF
9 Ensure to make arrangement with bankers for acceptance of share
application form
10 Ensure to prepare a scheme of allotment of shares
11 convene a board meeting and made allotment of shares
12 Make an application to the stock exchange where the company's
shares are listed for the permission of listing new shares
13 Check that a 3 day and 50 day monitoring report has been sent to
SEBI.
Please ignore Topics which is required for Listed Company.
Regards
Dipak Singh
neeti goel
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Santosh Ojha
Dear Neeti,
In continuation of Mr.Dipak Singh as posted above ,please go through the detail regarding the same mention below:-Right Issue
Definition/ Meaning
Rights Issue is when a listed company which proposes to issue fresh securities to its existing shareholders as on a record date. The rights are normally offered in a particular ratio to the number of securities held prior to the issue
Eligibility Conditions:
Until unless;
- The issuer or any of its promoters, promoter group or directors or persons in control of the issuer are not debarred from accessing the capital market by the Board
- It has entered into an agreement with a depository for dematerialisation of specified securities already issued.
- It has made an application to one or more recognised stock exchanges for listing of specified securities on such stock exchanges which has nationwide trading terminals.
- It is not in default of payment of interest or repayment of principal amount in respect of debt instruments issued by it to the public, if any, for a period of more than six months.
- &, all existing partly paid-up equity shares of the issuer have either been fully paid up or forfeited
Procedure
1. The issuer shall appoint one or more merchant bankers, at least one of whom shall be a lead merchant banker and lead merchant banker will appoint other intermediaries who will carry out the obligations relating to the issue i.e. Self Certified Syndicate Banks, Registrar to Issue etc.
2. No issuer shall make a right issue (except in case offer document is less than fifty lakh) unless a draft offer document has been filed with the Board through the lead merchant banker, at least thirty days prior to registering the prospectus, red herring prospectus or shelf prospectus with the Registrar of Companies or filing the letter of offer with the designated stock exchange.
3. If the Board specifies changes or issues observations on the draft offer document, the issuer and lead merchant banker shall carry out such changes it shall be carried out before such document is filed with the Registrar of Companies and file a copy of such document with the recognised stock exchanges where the specified securities are proposed to be listed.
4. The issuer shall obtain in-principle approval from recognised stock exchanges, where the specified securities are listed only on recognised stock exchanges having nationwide trading terminals.
5. The lead merchant bankers shall submit the following documents to the Board
a. A copy of the agreement entered into between the issuer and the lead merchant bankers.
b. A due diligence certificate at the time of registering the prospectus with the Registrar of Companies.
c. A statement certifying that all changes, suggestions and observations made by the Board.
d. A certificate from a Chartered Accountant, before opening of the issue, certifying that promoters’ contribution has been received in accordance with these regulations, accompanying therewith the names and addresses of the promoters who have contributed towards such contribution.
6. The draft offer document filed with the Board shall be made public, for comments, if any, for a period of at least twenty one days from the date of such filing, by hosting it on the websites of the Board, recognised stock exchanges where specified securities are proposed to be listed.
7. A listed issuer making a rights issue shall announce a record date for the purpose of determining the shareholders eligible to apply for specified securities in the proposed rights issue and No issuer shall make a rights issue of equity shares if it has outstanding fully or partly convertible debt instruments at the time of making rights issue, unless it has made reservation of equity shares of the same class in favour of the holders of such outstanding convertible debt instruments in proportion to the convertible part thereof.
8. The abridged letter of offer, along with application form, shall be dispatched through registered post or speed post to all the existing shareholders at least three days before the date of opening of the issue and it shall open for subscription for a minimum period of fifteen days and for a maximum period of thirty days.
9. The pre-issue advertisement shall be made in at least one English national daily newspaper with wide circulation, one Hindi national daily newspaper with wide circulation and one regional language daily newspaper with wide circulation at the place where registered office of the issuer is situated, at least three days before the date of opening of the issue.
10. The issuer shall appoint a compliance officer who shall be responsible for monitoring the compliance of the securities laws and for redressed of investors’ grievances.
11. The lead merchant banker shall submit post-issue reports to the Board
12. The merchant banker will publish a post issue-advertisement giving details relating to oversubscription, basis of allotment, number, value and percentage of all applications including ASBA, date of completion of despatch of refund orders or instructions to Self Certified Syndicate Banks by the Registrar, date of despatch of certificates and date of filing of listing application, etc. is released within ten days from the date of completion of the various activities in at least one English national daily newspaper with wide circulation, one Hindi national daily newspaper with wide circulation and one regional language daily newspaper with wide circulation at the place where registered office of the issuer is situated.
I wish it serve your purpose so far.
monika singh
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PLEASE CONSIDER THE ENVIRONMENT BEFORE PRINTING THIS MAIL.
REGARDS,
MONIKA SINGH