INDIA: SEBI Announces Reduction in Denomination of Debt Securities

Thursday July 4 2024

On 3^rd July 2024, the Securities Exchange Board of India (SEBI) issued a circular in regards to the reduction in denomination of debt securities and non-convertible redeemable preference shares. The certain amendments are being made in Chapter V (Denomination of issuance and trading of Non-convertible Securities) of the Master Circular:

Clause 1.3 shall be inserted with the following: The  Issuer may issue  debt  security  or  non-convertible  redeemable preference  share on private  placement  basis  at  a  face  value  of  Rs.10,000,

Subject to the following conditions:

a) The issuer shall appoint atleast one Merchant Banker. Provided  that  the role,  responsibilities  and  obligations  of  the  Merchant Banker(s) shall be same as they would be in case of public issue of debt security or non-convertible redeemable preference share.

b) Such debt security or non-convertible redeemable preference share shall be interest/dividend bearing security paying coupon/ dividend at regular intervals with a fixed maturity without any structured obligations.

The provisions of this circular shall be applicable to all issues of debt securities and non-convertible redeemable preference shares, on private placement basis that are proposed to be listed from the date of issuance of this circular.

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