SEBI Board Approves SME IPO Norm Changes | Mandates ‘Rs. 1 Crore’ Operating Profit in 2 of 3 Preceding Years for DRHP Filing
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- Last Updated on 20 December, 2024
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PR No.36/2024, Dated: 18.12.2024
SEBI, in its 208th Board Meeting, approved several amendments to regulations, including measures to enhance ease of doing business related to Business Responsibility & Sustainability Reporting, a review of the SME framework under ICDR Norms, a review of Merchant Bankers Regulations, etc.
The Board has approved amendments to the SEBI (LODR) Regulations, 2015 and SEBI (ICDR) Regulations, 2018, to mandate the issuer to have an operating profit of Rs. 1 crore from operations for any 2 out of 3 previous financial years at the time of filing of its draft red herring prospectus. Further, Offer for sale (OFS) by selling shareholders in SME IPO must not exceed 20% of the total issue size and selling shareholders cannot sell more than 50% of their holding.
Some of the key highlights of the Board Meeting are as follows –
- Amendments to SEBI (Depositories & Participants) Regulations, 2018 for provisions related to payment of annual fees and charge
- Recognition of a ‘Past Risk and Return Verification Agency’
- Mandating payments by listed entities to security holders in electronic form only
- Assigning responsibility for the use of ‘AI tools’ by MIIs and SEBI-Regulated persons
- Review of provisions regarding corporate governance norms for ‘High-Value Debt Listed Entities’
- Ease of doing business w.r.t Business Responsibility and Sustainability Report
- Measures towards ease of doing business for ESG Rating providers
- Measures towards ease of doing business for Small and Medium Real Estate Investment Trusts
- Amendments to SEBI (Mutual Funds) Regulations, 1996 to facilitate ease of doing business
- Amendments to the definition of UPSI to enhance clarity, certainty, an uniformity in compliance
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