RIGHTS ISSUE COMPLIANCE SERIES

Pre-Issue and Post-Issue Advertisement Disclosures under SEBI (ICDR) Regulations, 2018

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1. Introduction

A Rights Issue is a sensitive capital-raising mechanism under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“SEBI ICDR Regulations”), where transparency, investor protection, and timely disclosures are of paramount importance. Advertisements issued before and after the Rights Issue play a critical role in ensuring that shareholders are adequately informed and are able to exercise their rights effectively.

This document provides a comprehensive and practitioner-oriented compliance checklist for:

• Pre-Issue (Issue-related) Advertisements under Regulation 84, and

• Post-Issue Advertisements under Regulation 92 of the SEBI ICDR Regulations.

The objective is to offer a ready reference for Company Secretaries, compliance officers, merchant bankers, and listed entities, covering not only the statutory requirements but also practical compliance expectations.

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2. Pre-Issue Advertisement Compliance

2.1 Statutory Framework

Pre-issue advertisements for a Rights Issue are governed primarily by Regulation 84 of the SEBI ICDR Regulations, 2018. These advertisements are intended to inform existing shareholders about the availability of the Letter of Offer, application process, and alternative modes of applying, particularly where application forms are not received.

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2.2 Timing and Mode of Publication

The pre-issue advertisement must be published at least two (2) days prior to the opening of the Rights Issue.

Table 1: Publication Requirements – Pre-Issue Advertisement

Particulars	Requirement
Minimum gap before issue opening	At least 2 days
English newspaper	One English national daily with wide circulation
Hindi newspaper	One Hindi national daily with wide circulation
Regional language newspaper	One regional language daily with wide circulation at the place of the registered office
Stock exchange intimation	Copy of advertisement to be submitted to stock exchanges for dissemination on their websites

Compliance Note: Failure to adhere to the timing or publication criteria may render the issue non-compliant and may attract regulatory scrutiny.

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2.3 Mandatory Disclosures in Pre-Issue Advertisement

The following disclosures are mandatory and must be clearly and unambiguously stated:

(a) Dispatch and Availability of Application Forms

• Date of completion of dispatch of the Letter of Offer and application forms to eligible shareholders.

• Details of centres (other than the registered office) where duplicate application forms may be obtained.

(b) Alternative Application Mechanism

A specific statement must be included clarifying that shareholders who:

• Have not received the application form, and

• Are unable to obtain a duplicate application form,

may apply through the following alternative modes:

• Registrar to the issue’s website

• Website(s) of the stock exchange(s) where the equity shares are listed

• Plain paper application

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2.4 Plain Paper Application – Detailed Disclosure Requirements

Where an investor applies through a plain paper application, the advertisement must specify the minimum information to be furnished by the applicant.

Table 2: Information Required in Plain Paper Application

Sl. No.	Particulars
1	Name and address of the applicant
2	Rights issue ratio
3	Issue price per equity share
4	Number of equity shares held on record date
5	Ledger folio number(s) (for physical shareholders)
6	DP ID and Client ID (for demat shareholders)
7	Number of shares entitled under the Rights Issue
8	Number of shares applied for
9	Number of additional shares applied for, if any
10	Total amount to be blocked with the Self-Certified Syndicate Bank (SCSB)

Practical Insight: Clear articulation of these details reduces rejection risk and improves investor participation, particularly for non-tech-savvy shareholders.

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2.5 Warning on Duplicate Applications

The pre-issue advertisement must contain a specific cautionary statement that:

Applications made both through the application form and through a plain paper application are liable to be rejected at the option of the issuer.

This disclosure is intended to prevent multiple applications for the same entitlement and protect the integrity of the allotment process.

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2.6 Disclosures Relating to Renunciation and Specific Investors (If Applicable)

Where the Rights Issue involves renunciation or preferential allocation to specific investors, additional disclosures are mandatory.

Table 3: Renunciation and Investor-Specific Disclosures

Scenario	Required Disclosure
Renunciation in favour of specific investor(s)	Name(s) of such investor(s)
Renunciation by promoters / promoter group	Name of promoter(s) / promoter group
Extent of promoter renunciation	Number of rights entitlements renounced
Allotment of under-subscribed portion	Name(s) of specific investor(s) proposed to be allotted

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2.7 Restrictions on Advertisements During Issue Period

During the subsistence of the Rights Issue, the issuer is subject to strict advertisement restrictions.

The issuer shall not publish or cause to be published any advertisement, statement, or release that:

• States or implies that the issue has been fully subscribed

• States or implies over-subscription

• Indicates the level of investor response

Regulatory Rationale: These restrictions are aimed at preventing market manipulation, speculative trading, and misleading signals to investors.

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2.8 Issue Closure Advertisement

An announcement regarding closure of the Rights Issue can be made only after compliance with the following conditions:

• At least 90% subscription of the issue size is achieved

• A certificate confirming subscription level is obtained from the Registrar to the Issue

• No premature closure announcement is made, except in the format and manner expressly permitted under SEBI ICDR Regulations

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3. Post-Issue Advertisement Compliance

3.1 Statutory Framework

Post-issue advertisements are governed by Regulation 92 of the SEBI ICDR Regulations, 2018. These advertisements provide transparency on the outcome of the issue and completion of post-issue activities.

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3.2 Timing and Mode of Publication

The post-issue advertisement must be published within ten (10) days of completion of post-issue activities.

Table 4: Publication Requirements – Post-Issue Advertisement

Particulars	Requirement
Time limit	Within 10 days of completion of post-issue activities
English newspaper	One English national daily with wide circulation
Hindi newspaper	One Hindi national daily with wide circulation
Regional language newspaper	One regional language daily with wide circulation at registered office location

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3.3 Mandatory Contents of Post-Issue Advertisement

The post-issue advertisement must contain comprehensive information on the issue outcome.

Table 5: Mandatory Disclosures – Post-Issue Advertisement

Category	Disclosure Details
Subscription details	Number, value, and percentage of subscription
Basis of allotment	Summary of allotment methodology
Applications received	Total number of applications including ASBA
Successful allottees	Number, value, and percentage
Refund details	Date of completion of refund orders or instructions to SCSBs (if applicable)
Credit / dispatch	Date of dispatch of share certificates or credit of securities in demat form
Listing	Date of filing of listing application with stock exchanges

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3.4 Website Disclosure Requirements

In addition to newspaper publication, the issuer is required to upload the same post-issue advertisement details on:

• Website(s) of the stock exchange(s) where the securities are listed

This ensures wider dissemination and easy access for investors and regulators.

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4. Key Compliance Takeaways

• Pre-issue advertisements are investor-enablement tools, while post-issue advertisements are transparency and closure tools.

• Strict adherence to timing, content, and publication norms is essential to avoid regulatory observations.

• Disclosures relating to alternative application mechanisms and renunciation require particular attention.

• All advertisements should be vetted for consistency with the Letter of Offer and stock exchange filings.

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5. Disclaimer

The contents of this document are prepared based on the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 and information available as on date. While due care has been taken to ensure accuracy and completeness, no responsibility is assumed for any errors or omissions. This document is intended solely for informational and educational purposes and does not constitute legal advice. Readers are advised to refer to the applicable laws, regulations, circulars, and professional advisors before acting upon the information contained herein. No liability is accepted for any loss or consequences arising from reliance on this document.

From the desk of CS Sharath

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