Sebi has returned 17 OPI sacrifice documents in the last financial year, compared to seven in the previous prosecutor.
The companies whose documents were returned include Avase Financial, BMW Ventures and Vishal Mega Mart, who showed data from the Prime Database. (Some of these companies referred their offer documents and later clarified).
The supply documents of drafts that lack proper diligence or dissemination are returned, experts said. In fact, Vishal Mega Mart listed his actions in December after launching it OPO successfully.
“Sebi is strictly interpreting regulations and compliance in DRHP. There is no scope for any margin of maneuver or gray area,” said a banker.
Previously, there used to be a lot of round trip between the market regulator and the investment bankers in corrections and amplifications required for the prospect project, with the regulator asking for missing details and the bankers supply them.
In the last two years, the regulator has returned the documents to the bankers instead of letting them remain in the processing stage for an indefinite period of time. The regulator had previously drawn to take too much time for Greenlight IPO documents.
The regulator had issued guidelines to return the draft of offer documents and their renance in February last year. “It has been observed that sometimes, the sacrifice documents of drafts submitted to the Board for Public Issuance that lacks compliance with respect to the instructions proven in Annex VI of the ICDR regulations. These documents require reviews and, therefore, a longer processing time,
According to the circular, the draft of the offer document can be returned if it lacks substantial review or additions on key disseminations or corrective measures due to regulatory interpretation, among other things. The draft of the offer, including risk factors, must be in a simple language and should avoid inconsistency in data and facts.
“It could be that the regulator is not happy with the justification for working capital as an object of problems. Or there could be a problem with KPI’s revelations. Or smaller problems such as typographic errors. In all these a proportionate law,” he said.
The official, however, clarified that the return documents are preferable to the regulator that rejects the document, which would mean that the company cannot refill the document for a year.
“If they officially reject it under the general order, you cannot present the document for a year. But if the documents are returned, they can immediately say,” said the official.
Posted on April 16, 2025
