Sebi now requires a draft abridged prospectus at the DRHP stage for IPOs and allows debt issuers to offer incentives to retail investors.
Sebi board meeting: From now, companies will be required to make available a short, clear and standard summary of the offer document, known as a ‘draft abridged prospectus’, at the DRHP (Draft Red Herring Prospectus) stage itself, unlike only at the RHP (Red Herring Prospectus) stage as done earlier.
The Securities and Exchange Board of India (Sebi) approved the new changes in the IPO disclosure process in the meeting on Wednesday to enhance investor understanding, improve information accessibility, and increasing the engagement and participation of retail investors in the IPO process.
Until now, all material aspects of the public issue are required to be disclosed in the draft offer document (DRHP) and offer document (RHP). The key disclosures relating to the public issue are dispersed across multiple sections.
The board also approved the proposal to rationalise the disclosures in the abridged prospectus. It will be made available on the websites for investors to understand the IPO at ease.
Allowing Debt Issuers To Offer Incentives To Retail Investors
The Board considered and approved a proposal for amending SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (“NCS Regulations”) to permit debt issuers to offer incentives to certain categories of investors. It aims to enhance participation of retail investors in corporate debt market and also to encourage public issuances in the debt market.