Private placement of Debt Securities through Electronic Book Mechanism

In order to streamline the procedure for issuance of debt securities on private placement basis and enhance transparency to discover prices, SEBI has laid down a framework for issuance of debt securities on private placement basis through an electronic book mechanism.

The electronic book mechanism would be mandatory for all private placements of debt securities in primary market with an issue size of Rs. 500,00,00,000/- (Rupees Five Hundred Crores) or more. Electronic book mechanism will be optional for all issues below Rs. 500,00,00,000/- (Rupees Five Hundred Crores only), but the issuers will have to disclose the coupon rate, amount raised, number of investors to the Electronic Book Provider (“EBP”) or to the information repository for corporate debt market, in the format specified by SEBI.

The recognized stock exchanges shall be eligible to act as an EBP after obtaining prior approval from SEBI. The EBPs shall provide an on-line platform for receiving bids, operational procedure, timeline for bidding and shall address all investor grievances which may arise from the bidding process. The electronic book building mechanism for listed privately placed securities will be effective from July 01, 2016.