On March 19, the Securities and Exchange Board of India (SEBI) proposed the incorporation of audio-visual (AV) representations in companies’ offer documents for public issues. This initiative aims to assist investors in better understanding the crucial aspects of an offer, according to a PTI report.
Stakeholders have been invited to provide their feedback to the capital markets regulator on this proposal until April 9.
Key Details of the Proposal:
SEBI suggests that companies seeking listing on the main board should include disclosures from their Draft Red Herring Prospectus (DRHP) and Red Herring Prospectus (RHP) in an Audio-Visual (AV) format.
The AV presentations related to public issues will be bilingual, available in English and Hindi, and accessible to the public.
The regulator anticipates that these AV presentations will simplify comprehension of significant features and provide references to various disclosures in the proposed public issue. Each bilingual AV version is recommended to have a maximum duration of 8 minutes, evenly distributing the total duration among essential disclosures such as risk factors, capital structure, objectives of the offer, issuer’s business, financial information, litigations, and material developments.
SEBI also proposes that the AV content should be factual, non-repetitive, and free from promotional material. Additionally, it mandates updating the AV with the latest information at the RHP stage.
Publication and Accessibility:
- The AV presentations are required to be published by the issuer or lead manager of the offer within five working days during both the submission and resubmission stages of the DRHP.
- These AV presentations will be made available on digital and social media platforms of the Issuer and the Association of Investment Bankers of India (AIBI).
- Web links to the AV presentations will also be provided on stock exchanges’ websites and lead managers’ websites, accessible through QR codes related to the public issue.
Companies planning to raise capital through public issues are obligated to file a DRHP with SEBI and stock exchanges. The disclosures in the DRHP are updated in accordance with observations from the regulator and bourses. Subsequently, the RHP is filed with SEBI and the Registrar of Companies (RoC).
