May 18, 2011

Adjustment of Differential Pricing Amount

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Adjustment of Differential Pricing Amount

Regulation 29 of SEBI ICDR Regulations allows an Issuer Company to issue specified securities at different prices subject to the conditions mentioned therein.

However, it was being observed by SEBI that the effect of such differential pricing, in a public issue, was being given to the eligible investors only at the stage of allotment of specified securities and not at the time of filing an application for such allotment. This was taking away certain benefits from the investors such as lower cash outflow at a price net of discount, the ability to apply for more shares with the same cash outlay, etc.

Thus to address this issue, SEBI has vide its Circular No.CIR/CFD/DIL/2/2011 dated 16th May 2011 has issued a Clarificatory Circular so as to allow investors eligible for differential pricing to make the payment of discounted price at the time of bidding itself, subject to compliance of appropriate disclosure and other norms.

Click here to download the Circular.

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