The proposed framework aims to streamline the process for NPOs to issue Zero Coupon Zero Principal instruments and other permitted securities on the SSE by introducing a common bidding and settlement platform called the SSE Electronic Book Provider (SSE-EBP), the regulator stated in a consultation paper.
Under the draft circular, NPOs intending to raise Rs 50 lakh or more in a single issue or via shelf issues will have to use this new platform. The SSE-EBP will be open to a wide range of participants, including qualified institutional buyers, non-institutional and retail investors.
However, foreign portfolio investors and foreign funds will not be allowed to participate, Sebi said.
Also, the regulator said issuers will be required to submit detailed fundraising documents and term sheets ahead of the issue date, specifying project details, issue size, and other key terms.
Further, investors will be able to place bids through an anonymous pooling system on working days between 9 am and 5 pm, on the working days of the recognised stock exchanges. Allotments will be made on a first-come-first-serve basis or pro-rata where applicable, the regulator said in the consultation paper.The issuer are required to submit a Draft Fund Raising Document (DFRD) and a term sheet outlining issue details such as size, bid terms, minimum lot size and mode of allotment. These details must be filed two working days before the issue date or five working days in case of a first-time issuer, it added.
To ensure transparency and accountability, Sebi has laid down strict guidelines for KYC, disclosures, and escrow-based fund settlement.
Any failure by successful bidders to make payment on time will lead to a 30-day debarment on the SSE-EBP platform.
Similarly, issuers who withdraw from the issue without valid reasons may be barred from accessing the platform for 7 days. Exceptions include cases where the issue fails to garner at least 75 per cent subscription or where investors default on payments.
The Securities and Exchange Board of India (Sebi) has invited public comments on the draft circular till July 24.
The proposed mechanism is expected to improve investor confidence and promote capital mobilisation for social impact initiatives.
