https://v2.webnotes.in/tags/icdr/Recent content in ICDR on WebNotesHugoen-INTue, 12 May 2026 00:00:00 +0000https://v2.webnotes.in/how-to-apply-rights-issue-zerodha/Tue, 12 May 2026 00:00:00 +0000https://v2.webnotes.in/how-to-apply-rights-issue-zerodha/<p>A <strong>rights issue</strong> is a corporate action in which a listed company offers additional shares to its existing shareholders at a discounted price, in proportion to their current holdings, before approaching the general public. Shareholders receive <strong>Rights Entitlements (REs)</strong>, tradeable instruments credited to their demat accounts, representing the right to subscribe to a specified number of new shares at the issue price.</p> <p>A 1:4 rights issue means one new share can be subscribed for every four existing shares held on the record date. Shareholders may:</p>https://v2.webnotes.in/anchor-investor/Mon, 11 May 2026 00:00:00 +0000https://v2.webnotes.in/anchor-investor/<p>An <strong>anchor investor</strong> in an Indian <a href="https://v2.webnotes.in/initial-public-offering/">Initial Public Offering</a> (IPO) is a <a href="https://v2.webnotes.in/qualified-institutional-buyer/">qualified institutional buyer</a> (QIB) that applies for shares in the IPO on the working day before the public subscription window opens, at a specific price called the <em>anchor allocation price</em>, and receives an allotment of shares before the general public has had an opportunity to bid. The anchor investor mechanism was introduced by SEBI through Schedule XIII of the <a href="https://v2.webnotes.in/sebi-icdr-regulations-2018/">SEBI (ICDR) Regulations, 2018</a> (originally notified under the 2009 ICDR and carried forward into the 2018 version) to provide a visible institutional endorsement of an IPO before the retail and NII subscription period opens, thereby reducing informational uncertainty for retail investors and potentially stabilising the listing-day price.</p>https://v2.webnotes.in/book-building/Mon, 11 May 2026 00:00:00 +0000https://v2.webnotes.in/book-building/<p><strong>Book building</strong> is the price-discovery mechanism used in the majority of Indian <a href="https://v2.webnotes.in/initial-public-offering/">Initial Public Offering</a> (IPO) and Follow-on Public Offer (FPO) transactions, in which the issuer, through the <a href="https://v2.webnotes.in/book-running-lead-manager/">book running lead manager</a> (BRLM), solicits price-and-quantity bids from investors across all eligible categories during a defined subscription window, aggregates the demand schedule to construct an order book, and then selects a final issue price that clears the issue within the constraints set by <a href="https://v2.webnotes.in/sebi-icdr-regulations-2018/">SEBI (ICDR) Regulations, 2018</a>. The term is borrowed from the analogous process used in international equity capital markets, where investment banks &ldquo;build a book&rdquo; of orders before pricing a new equity offering.</p>https://v2.webnotes.in/book-running-lead-manager/Mon, 11 May 2026 00:00:00 +0000https://v2.webnotes.in/book-running-lead-manager/<p>A <strong>book running lead manager</strong> (<strong>BRLM</strong>), also referred to as a <em>lead manager</em> or <em>book runner</em>, is a SEBI-registered merchant banker appointed by an issuer to manage the preparation, filing, marketing, and execution of a book-built public offer of securities in India. The BRLM is the central co-ordinating intermediary in an <a href="https://v2.webnotes.in/initial-public-offering/">Initial Public Offering</a> (IPO): it prepares the <a href="https://v2.webnotes.in/draft-red-herring-prospectus/">Draft Red Herring Prospectus</a> (DRHP) and the <a href="https://v2.webnotes.in/red-herring-prospectus/">Red Herring Prospectus</a> (RHP), interfaces with <a href="https://v2.webnotes.in/sebi-investment-management-department/">SEBI</a> during the regulatory review, manages the investor roadshow, co-ordinates with the registrar, the exchanges, and the sponsor banks, recommends the final issue price to the issuer&rsquo;s board after the <a href="https://v2.webnotes.in/book-building/">book-building</a> process concludes, and files the final prospectus. Larger issues commonly appoint multiple BRLMs, in which case one or more are designated as &ldquo;global co-ordinators&rdquo; or &ldquo;book running lead managers&rdquo; and the others as &ldquo;co-book running lead managers&rdquo; or &ldquo;co-managers&rdquo;, with their respective responsibilities delineated in the inter-se allocation agreement.</p>https://v2.webnotes.in/cut-off-price/Mon, 11 May 2026 00:00:00 +0000https://v2.webnotes.in/cut-off-price/<p>The <strong>cut-off price</strong> (also written as <em>cutoff price</em>) in an Indian <a href="https://v2.webnotes.in/initial-public-offering/">Initial Public Offering</a> (IPO) is a bidding option available exclusively to <a href="https://v2.webnotes.in/retail-individual-investor/">retail individual investors</a> under the <a href="https://v2.webnotes.in/book-building/">book-building</a> process, under which the investor agrees to accept the final issue price at which the IPO is priced, whatever that price turns out to be within the <a href="https://v2.webnotes.in/ipo-price-band/">price band</a>, without specifying a particular price at the time of bidding. A cut-off bid is treated as equivalent to a bid at the upper end of the price band for the purpose of calculating the amount to be blocked under <a href="https://v2.webnotes.in/asba/">ASBA</a> or <a href="https://v2.webnotes.in/upi-asba/">UPI ASBA</a>; if the final issue price is lower than the upper band, the excess amount is released to the investor after allotment. The cut-off option is specified by the <a href="https://v2.webnotes.in/sebi-icdr-regulations-2018/">SEBI (ICDR) Regulations, 2018</a> as a convenience mechanism for retail investors who do not wish to estimate whether the final issue price will be at the floor, the ceiling, or somewhere within the band.</p>https://v2.webnotes.in/draft-red-herring-prospectus/Mon, 11 May 2026 00:00:00 +0000https://v2.webnotes.in/draft-red-herring-prospectus/<p>A <strong>Draft Red Herring Prospectus</strong> (<strong>DRHP</strong>) is the preliminary offer document that an issuer files with the <a href="https://v2.webnotes.in/sebi-investment-management-department/">Securities and Exchange Board of India</a> (SEBI), the concerned stock exchange(s), and the SEBI-designated public repository before a book-built <a href="https://v2.webnotes.in/initial-public-offering/">Initial Public Offering</a> (IPO) or Follow-on Public Offer. The DRHP precedes the <a href="https://v2.webnotes.in/red-herring-prospectus/">Red Herring Prospectus</a> (RHP) in the IPO lifecycle and serves as the document on which SEBI conducts its regulatory review. Unlike the RHP, the DRHP does not contain the <a href="https://v2.webnotes.in/ipo-price-band/">price band</a>, the <a href="https://v2.webnotes.in/ipo-lot-size/">lot size</a>, the subscription opening and closing dates, or the final allotment methodology; these fields are left blank or indicated as &ldquo;to be determined&rdquo; pending the issuer&rsquo;s decision after SEBI&rsquo;s observations have been incorporated. The DRHP is a public document; SEBI posts it on its primary issues portal on the date of filing, allowing any member of the public, media organisation, analyst, or prospective investor to read and comment on it during the thirty-day observation window.</p>https://v2.webnotes.in/ipo-lot-size/Mon, 11 May 2026 00:00:00 +0000https://v2.webnotes.in/ipo-lot-size/<p>The <strong>IPO lot size</strong> is the minimum number of equity shares that an investor must apply for in a single bid in an <a href="https://v2.webnotes.in/initial-public-offering/">Initial Public Offering</a> (IPO). All bids in an IPO must be in integer multiples of the lot size; a bid for a quantity that is not a multiple of the lot is invalid and is rejected by the exchange&rsquo;s Issue Module. The lot size is set by the issuer in consultation with the <a href="https://v2.webnotes.in/book-running-lead-manager/">book running lead manager</a> (BRLM) and is disclosed in the <a href="https://v2.webnotes.in/red-herring-prospectus/">Red Herring Prospectus</a> (RHP) and all associated advertisements. The <a href="https://v2.webnotes.in/sebi-icdr-regulations-2018/">SEBI (ICDR) Regulations, 2018</a> prescribe the minimum application value that the lot size must satisfy, rather than prescribing the lot size in number of shares directly; the number of shares per lot is derived from the issue price and the minimum value target.</p>https://v2.webnotes.in/ipo-price-band/Mon, 11 May 2026 00:00:00 +0000https://v2.webnotes.in/ipo-price-band/<p>The <strong>IPO price band</strong> is the range of prices within which investors may submit their bids in a book-built <a href="https://v2.webnotes.in/initial-public-offering/">Initial Public Offering</a> (IPO) in India. The price band has a lower bound (the <em>floor price</em>) and an upper bound (the <em>cap price</em>). Bids submitted below the floor or above the cap are rejected by the exchange&rsquo;s Issue Module. The <a href="https://v2.webnotes.in/sebi-icdr-regulations-2018/">SEBI (ICDR) Regulations, 2018</a> limit the spread of the price band to a maximum of 20% above the floor (i.e., the cap cannot exceed 1.2× the floor). Most issuers set much narrower bands in practice, typically 5% or 10%, to concentrate investor demand near the upper end and simplify price discovery. The price band is disclosed in the <a href="https://v2.webnotes.in/red-herring-prospectus/">Red Herring Prospectus</a> (RHP) and in all issue advertisements; it is the primary parameter from which the <a href="https://v2.webnotes.in/ipo-lot-size/">lot size</a> and the blocked amount under <a href="https://v2.webnotes.in/asba/">ASBA</a> or <a href="https://v2.webnotes.in/upi-asba/">UPI ASBA</a> are derived.</p>https://v2.webnotes.in/mainboard-ipo/Mon, 11 May 2026 00:00:00 +0000https://v2.webnotes.in/mainboard-ipo/<p>A <strong>mainboard IPO</strong> is a public issue of equity shares by a company on the main trading segment of the <a href="https://v2.webnotes.in/national-stock-exchange/">National Stock Exchange</a> (NSE) or the <a href="https://v2.webnotes.in/bombay-stock-exchange/">Bombay Stock Exchange</a> (BSE), as distinguished from the SME platforms (NSE Emerge and BSE SME) that operate under a separate and lighter regulatory regime. Mainboard IPOs are governed by Chapters II through VIII of the <a href="https://v2.webnotes.in/sebi-icdr-regulations-2018/">SEBI (ICDR) Regulations, 2018</a> and apply to issuers whose post-issue paid-up equity capital will exceed ₹25 crore, or those below ₹25 crore who voluntarily choose the mainboard route and meet the mainboard eligibility criteria. The mainboard is the segment on which all large and most mid-sized Indian companies list; household names such as Zomato, LIC, Hyundai India, Tata Technologies, and Paytm are mainboard listings.</p>https://v2.webnotes.in/mainboard-vs-sme-ipo/Mon, 11 May 2026 00:00:00 +0000https://v2.webnotes.in/mainboard-vs-sme-ipo/<p>The Indian public issue market operates on two parallel regulatory tracks: the <strong>mainboard</strong>, governed by Chapters II-VIII of the <a href="https://v2.webnotes.in/sebi-icdr-regulations-2018/">SEBI (ICDR) Regulations, 2018</a>, and the <strong>SME platform</strong>, governed by Chapter IX of the same regulations. Issuers self-select between these tracks based primarily on their post-issue paid-up capital: companies with paid-up capital above ₹25 crore after the issue are required to list on the mainboard, while companies with paid-up capital between ₹1 crore and ₹25 crore may choose the SME platform. The two tracks differ substantially in eligibility criteria, disclosure burden, minimum lot sizes, investor category composition, post-listing obligations, and the market-making arrangement available to listed companies.</p>https://v2.webnotes.in/reading-rhp/Mon, 11 May 2026 00:00:00 +0000https://v2.webnotes.in/reading-rhp/<p>A <a href="https://v2.webnotes.in/red-herring-prospectus/">Red Herring Prospectus</a> (RHP) is the legally binding offer document that an <a href="https://v2.webnotes.in/initial-public-offering/">Initial Public Offering</a> (IPO) issuer files with <a href="https://v2.webnotes.in/sebi-investment-management-department/">SEBI</a>, the exchanges, and the Registrar of Companies before the subscription window opens. It is the single authoritative source of information on an IPO and the document from which institutional investors, analysts, and journalists draw their assessments of the issue. For retail investors accustomed to summary notes and social-media commentary, the RHP can be daunting: mainboard RHPs typically run to 300-700 pages. This article provides a structured reference guide to the sections of an RHP that are most relevant to an investor evaluating an IPO, ordered by their analytical importance.</p>https://v2.webnotes.in/red-herring-prospectus/Mon, 11 May 2026 00:00:00 +0000https://v2.webnotes.in/red-herring-prospectus/<p>A <strong>Red Herring Prospectus</strong> (<strong>RHP</strong>) is the legally binding offer document that an issuer files with the <a href="https://v2.webnotes.in/sebi-investment-management-department/">Securities and Exchange Board of India</a> (SEBI), the stock exchanges, and the Registrar of Companies before opening an <a href="https://v2.webnotes.in/initial-public-offering/">Initial Public Offering</a> (IPO) to public subscription. It derives its name from the mandatory disclaimer, printed in red ink on the front page of early-twentieth-century American prospectuses, warning readers that the document was not yet final. In India the term has been formalised under the <a href="https://v2.webnotes.in/sebi-icdr-regulations-2018/">SEBI (ICDR) Regulations, 2018</a>, which defines the RHP as a prospectus filed under section 32 of the Companies Act, 2013, that does not contain the final offer price or final number of shares offered but contains all other material disclosures. The final price, and in some structures the exact number of equity shares, are inserted in a supplementary document called the <em>Prospectus</em> or <em>Pricing Supplement</em> filed after the <a href="https://v2.webnotes.in/book-building/">book building</a> process concludes and before allotment.</p>https://v2.webnotes.in/sebi-icdr-regulations-2018/Mon, 11 May 2026 00:00:00 +0000https://v2.webnotes.in/sebi-icdr-regulations-2018/<p>The <strong>SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018</strong> (commonly abbreviated <strong>ICDR Regulations</strong> or <strong>ICDR 2018</strong>) are the principal substantive regulations governing public issuances of equity and certain other securities by Indian companies. Notified by the <a href="https://v2.webnotes.in/sebi-investment-management-department/">Securities and Exchange Board of India</a> on 11 September 2018 under SEBI/LAD-NRO/GN/2018/31, the regulations replaced the earlier SEBI (ICDR) Regulations, 2009 and came into force on their date of notification.</p> <p>The regulations apply to every initial public offering (IPO), follow-on public offering (FPO), rights issue, bonus issue, preferential allotment, and qualified institutions placement (QIP) by an Indian listed or to-be-listed company. They establish the eligibility conditions for accessing the public capital markets, prescribe the content and review process for offer documents, specify pricing methodologies, set out allotment norms, and impose post-listing obligations in respect of the funds raised.</p>https://v2.webnotes.in/sebi-icdr-summary/Mon, 11 May 2026 00:00:00 +0000https://v2.webnotes.in/sebi-icdr-summary/<p>This article summarises the principal provisions of the <a href="https://v2.webnotes.in/sebi-icdr-regulations-2018/">SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018</a> (ICDR 2018), the regulations administered by the <a href="https://v2.webnotes.in/sebi-investment-management-department/">Securities and Exchange Board of India</a> that govern public equity issuances in India. For the full treatment, including regulatory history, chapter structure, and comparison with international frameworks, refer to the main ICDR 2018 article.</p> <hr> <h2 id="what-icdr-2018-governs">What ICDR 2018 governs</h2> <p>The ICDR Regulations apply to every public issuance of equity (and certain other securities) by Indian companies, including:</p>https://v2.webnotes.in/sme-ipo/Mon, 11 May 2026 00:00:00 +0000https://v2.webnotes.in/sme-ipo/<p>An <strong>SME IPO</strong> is a public issue of equity shares by a small or medium enterprise on a SEBI-recognised SME platform, specifically NSE Emerge or BSE SME, under a lighter regulatory and disclosure regime than the mainboard <a href="https://v2.webnotes.in/initial-public-offering/">Initial Public Offering</a> (IPO). The regulatory basis for the SME IPO is Chapter IX of the <a href="https://v2.webnotes.in/sebi-icdr-regulations-2018/">SEBI (ICDR) Regulations, 2018</a>, which sets separate eligibility criteria, disclosure standards, allotment mechanics, and post-listing obligations for companies with a post-issue paid-up capital below ₹25 crore. The SME IPO framework was introduced to give smaller companies access to public capital markets that were practically inaccessible under the mainboard regime, while simultaneously capping the retail participation through significantly higher minimum lot sizes, typically equivalent to an investment of ₹1,00,000 to ₹1,50,000 per application, compared with ₹10,000 to ₹15,000 for mainboard issues.</p>