Public Offering Regulations, 2017 -Chapter 1 to 5

GOVERNMENT OF PAKISTAN

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN

Islamabad, the 2nd May, 2017

NOTIFICATION

S. R. O.296(I)/2017.__ In exercise of powers conferred by sections 19, 87, 88, 89, 90,
91, 94 and 95 read with section 169 of the Securities Act, 2015 (III of 2015), the Securities and
Exchange Commission of Pakistan hereby makes the following regulations, the same have been
previously published in the official Gazette vide Notification No.S.R.O.1139(I)/2015 dated 16th
November 2015 as required by sub-section (4) of section 169 of the Act, namely:-

CHAPTER I

PRELIMINARY

1. Short title, commencement and applicability.__ (1) These Regulations shall

be called the Public Offering Regulations, 2017.

(2) They shall come into force at once.

(3) They shall apply to:

(i) a public limited company or body corporate proposing to issue securities to the
general public;

(ii) an Offeror who intends to offer securities to the general public; and

(iii) sponsors of the public limited company or body corporate, the Consultants to
the Issue, the Underwriter, the Book Runner, the Designated Institution, the
Banker to an Issue, Investment Agent and Issuing and Paying Agent.

(4) These Regulations shall not apply to an Issue by Special Purpose Vehicle or
body corporate specifically setup by the Federal Government or any provincial Government
for the purpose of issue of any debt security, under any other law or offer of securities as
mentioned under sub-section (4) of section 87 of the Act.

2. Definitions.__ (1) In these Regulations, unless there is anything repugnant in the

subject or context, –

(i) “Abridged Prospectus” means condensed form of the Prospectus containing

such information and disclosures as mentioned in Second Schedule to these
Regulations;

(ii) “Act” means the Securities Act, 2015 (III of 2015);

(iii) “Application Supported by Blocked Amount” means an application for

subscription to shares or bidding, where money is blocked in the applicant’s

Page 1 of 130
 or bidder’s respective bank account;

(iv) “Banker to an Issue” means a scheduled bank licensed by the Commission

as a Banker to an Issue.;
1
[(v) “Bid” in case of shares means an intention to buy a specified number of
shares at a specified price;]
2
[(va) “Bid” in case of debt securities means an intention to buy a specified number
of debt securities for a particular profit rate/spread;]

(vi) “Bid Amount or Bid Money” 3[in case of shares] means the amount equal
to the product of the number of shares bid for and the Bid Price;
4
[(via) “Bid Amount or Bid Money” in case of debt securities means the amount
equal to the product of the number of debt securities bid for and the face
value of debt security;]

(vii) “Bid Collection Center” includes designated offices of the Book Runner,
specified branches of any scheduled bank and offices of any other institution
specified by the Book Runner where bids are received and processed;

(viii) “Bidder” means an investor who makes a bid for subscription of

5
[securities] in the Book Building process;

(ix) “Bidding Period” means the period during which bids for subscription of
6
[securities] are received;

(x) “Bid Price” means the price at which Bid is made for a specified number of
shares;
7
[(xi) “Book Building” in case of shares means a process undertaken to elicit
demand for shares under which bids are collected from the Bidders and a
book is built which depicts demand for the shares at different price levels;]
8
[(xia) “Book Building” in case of debt securities means a process undertaken to
elicit demand for debt securities under which bids are collected from the
Bidders and a book is built which depicts demand for the debt securities at
different profit rate/spread levels;]

(xii) “Book Building Portion” means the part of the total Issue which has been
allocated for subscription through Book Building;

(xiii) “Book Building System” means an online electronic system operated by the

1 Substituted for the text “(v) “Bid” means an intention to buy a specified number of securities at a specified price;” vide SRO
819(I)/2020 dated September 7, 2020
2 Inserted vide SRO 819(I)/2020 dated September 7, 2020
3 Inserted vide SRO 819(I)/2020 dated September 7, 2020
4 Inserted vide SRO 819(I)/2020 dated September 7, 2020
5 Substituted for the word “shares” vide SRO 819(I)/2020 dated September 7, 2020
6 Substituted for the word “shares” vide SRO 819(I)/2020 dated September 7, 2020
7 Substituted for the text “(xi) “Book Building” means a process undertaken to elicit demand for shares offered for sale through
which bids are collected from the Bidders and a book is built which depicts demand for the securities at different price levels;”
vide SRO 819(I)/2020 dated September 7, 2020
8 Inserted vide SRO 819(I)/2020 dated September 7, 2020

Page 2 of 130
 Designated Institution for conducting Book Building;

(xiv) “Book Runner” means a securities broker or a scheduled bank who holds a
valid license from the Commission to act as an Underwriter;

(xv) “Centralized E-PO System (CES)” means a centralized system through

which applications for subscription of securities through Public Offering
can be made electronically through internet, Automated Teller Machines
(ATM) and mobile phones;

(xvi) “Commercial Paper” means an unsecured debt security with a maturity of

not less than 30 days and not more than one year;
1
[(xvia) Companies Act” means Companies Act, 2017 (XIX of 2017);]

(xvii) “Consultants to the Issue” means any person licensed by the Commission
to act as a Consultant to the Issue 2[, which may also be called Lead Manager
or Advisor];

(xviii) “Consolidated Bid” mean a bid which is fully or partially beneficially

owned by persons other than the one named therein.
3
[(xviiia) “Cut off profit rate/spread” mean the profit rate/spread of a debt security
determined on the basis of book building process.]
4
[(xviiib) “Custodian” means an investment agent/debt securities trustee, Bank,
Investment Finance Service license holder and Depository Company
engaged in regulated activities, not being an associate of the Special Purpose
Acquisition Company, appointed for securing the monies of investors in the
escrow account;]

(xix) “Debt Securities Trustee” means a person licensed by the Commission

under the Act and appointed as a Debt Securities Trustee by an Issuer
5
[through execution of trust deed];

(xx) “Designated Institution” includes the securities exchange, central depository

and clearing company to provide Book Building System;
6
[(xxia) “Escrow Account” means an account maintained with a scheduled bank
(having an investment grade rating) by a custodian;]

(xxi) “Dutch Auction Method” means the method through which Strike Price is
determined by arranging all the Bids in descending order based on the Bids
Prices along with the number of shares and the cumulative number of shares
bid for. The Strike Price is determined by lowering the Bid Price to the
extent that the total number of securities offered under the Book Building
Portion are subscribed;

(xxii) “Financial Institution” means a financial institution as defined in the

1 Inserted vide SRO 838(I)/2017 dated August 23, 2017

2 Inserted vide SRO 1619 (I)/2019 dated December 26, 2019
3 Inserted vide SRO 819(I)/2020 dated September 7, 2020
4
Inserted vide SRO 1214 (I)/2021 dated September 15, 2021
5 Substituted for the words “of debt security” vide SRO 1383(I)/2020 December 23, 2020
6
Inserted vide SRO 1214 (I)/2021 dated September 15, 2021

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 1
[Companies Act];

(xxiii) “Floor Price” in case of book building means the minimum price per share
set by the Issuer in consultation with Consultant to an Issue;
2
[(xxiiia) “Green Field Project” includes a project that is being newly built by the
Issuer and has not commenced commercial production/operation;]
3
[(xxiiib) “Government Guaranteed Sukuk” means Sukuk issued by any corporation
or body corporate owned and controlled by the Federal Government and
such Sukuk is guaranteed by the Federal Government;]

(xxiv) “Green Shoe Option” means a pre-determined number of securities to be

issued by the Issuer in case of over-subscription of the issue;

(xxv) “Initial Public Offering or IPO” means first time offer of securities to the
general public;

(xxvi) “Institutional Investors” means any of the following entities:

(a) A financial institution;

(b) A company as defined in the 4[Companies Act];

(c) An insurance company established under the Insurance Ordinance,

2000;

(d) A securities broker;

(e) A fund established as Collective Investment Scheme under the Non-

Banking Finance Companies and Notified Entities Regulations,
2008;

(f) A fund established as Voluntary Pension Scheme under the

Voluntary Pension System Rules, 2005;

(g) A private fund established under Private Fund Regulations, 2015;

(h) Any employee’s fund established for beneficial of employees;

(i) Any other fund established under any special enactment; 5[ ]

6
[(ia) A foreign company or any other foreign legal person; and]

(j) Any other entity as specified by the Commission.

7
[(xxvii) “Investment agent means an entity that holds a valid license to act as

1 Substituted for the word “Ordinance” vide SRO 838(I)/2017 dated August 23, 2017
2 Inserted vide SRO 7(I)/2018 dated January 5, 2018
3 Inserted vide SRO 819(I)/2020 dated September 7, 2020
4 Substituted for the words “Companies Ordinance, 1984 (XLVII of 1984)” vide SRO 838(I)/2017 dated August 23, 2017
5 Deleted the word “and” vide SRO 838(I)/2017 dated August 23, 2017
6 Inserted vide SRO 838(I)/2017 dated August 23, 2017
7 Substituted for the text “(xxvii) “Investment Agent” means an Institution licensed by the Commission as a Debt Securities

Trustee and appointed by the Issuer through execution of investment agency agreement. The Investment Agent shall be
responsible to facilitate issue and sale of Sukuk and other Shariah compliant securities under these Regulations and to safeguard
interest of the holders of Sukuk and other Shariah compliant securities;” vide SRO 1383(I)/2020 December 23, 2020

Page 4 of 130
 Consultant to the Issue under the Act and is appointed by the issuer through
execution of issuance agreement;]

(xxviii) “Issue” means public offer of securities to the general public or a class
thereof by an Issuer;
1
[(xxix) “Issuer” in relation to securities, means any person including a company, a
Special Purpose Vehicle and a body corporate who has issued or proposes
to issue a security and includes an Offeror;]

(xxx) “Issuing and Paying Agent” means a Financial Institution appointed by an

Issuer of Commercial Paper under these Regulations as an Issuing and
Paying Agent;
2
[omitted]
3
[(xxxii) “Limit Bid” in case of shares mean a bid placed by the bidder at a maximum
price that he is willing to pay for shares under the Book Building method;]
4
[(xxxiib) Limit bid in case of debt security means a bid placed by the bidder for a
particular profit rate/spread under the book building method.]
5
[(xxxiia) “Limited Liability Partnership (LLP)” means a partnership registered under
the Limited Liability Partnership Act, 2017;]

(xxxiii) “Minimum Bid Size” means the Bid Amount equal to 6[one] million rupees
under the Book Building method;
7
[(xxxiiia) “Merger” means the merger, acquisition, amalgamation, combination or
joining of two or more companies or other entities as may be specified by
the Commission for the purpose of merger or part thereof into an existing
company;]

(xxxiv) “Offeror” means any person or entity holding, directly or indirectly, such
number of securities as prescribed in these Regulations and offers such
securities for sale to the public or invites any other person to make
subscription for such an offer and includes an Issuer;

(xxxv) “Offer Size” means the total number of securities offered for sale
comprising allocation to the Book Building Portion and allocation to the
retail portion, if any, excluding pre-IPO placement;
8
[(xxxva) “Offer Price” means the price per share at which shares are offered to the
general public in case of Fixed Price method and the retail investors in case
of the Book Building and set by the Issuer in consultation with the

1 Substituted for the words “(xxix) “Issuer” in relation to securities, means any person who has issued or proposes to issue a
security and includes an Offeror;” vide SRO 838(I)/2017 dated August 23, 2017
2 Deleted the text “(xxxi) “Limit Price” means the maximum price a prospective Bidder is willing to pay for a share under the
Book Building method;” vide SRO 819(I)/2020 dated September 7, 2020
3 Substituted for the text “(xxxii) “Limit Bid” means a bid by the Bidder at a Limit Price under the Book Building method;”
vide SRO 819(I)/2020 dated September 7, 2020
4 Inserted vide SRO 819(I)/2020 dated September 7, 2020
5 Inserted vide SRO 838(I)/2017 dated August 23, 2017
6 Substituted for the word “6two” vide SRO 819(I)/2020 dated September 7, 2020
7
Inserted vide SRO 1214 (I)/2021 dated September 15, 2021
8 Inserted vide SRO 7(I)/2018 dated January 5, 2018

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 Consultant to the Issue;]

(xxxvi) “Offer for Sale” means an offer of securities for sale to the general public
by an Offeror;
1
[(xxxvia) “Permitted Investments” means investments in Government securities,
mutual funds (except equity based), money market instruments, debt
securities and sukuks with investment grade ratings;]
2
[(xxxvii) “Price Band” in case of Book Building means Floor Price with an upper
limit of 40% above the Floor Price, allowing Bidder to make Bid at Floor
Price or within the Price Band;]
3
[Omitted]

(xxxviii) “Prospectus” includes any document, notice, circular, material,

advertisement, offer for sale document, publication or other invitation
offering to the public (or any section of the public) or inviting offers from
the public for the subscription or purchase of any securities of a company,
body corporate or entity, other than deposits invited by a bank and certificate
of investments and certificate of deposits issued by non-banking finance
companies;

(xxxix) “Public Offer” means offer of securities by an Issuer including an offer to

the general public or a section of the public but does not include Private
Offer or Private Placement;

(xl) “Regulations” means the Public Offering Regulations, 2017;

(xli) “Related Employees” mean such employees of the Issuer, the Offeror, the
Book Runner, the Underwriters, and the Consultants to the Issue, who are
involved in the Issue or the Offer for Sale;

(xlii) “Retail Investor” means an investor who bids for a security or make an
application for subscription of a security out of the offer size allocated to the
general public;
4
[(xliia) “Reverse Dutch Auction Method” means the method through which the
cutoff profit rate/spread is determined by arranging all the profit rate/spread
in an ascending order along with the number of debt securities and the
cumulative number of debt securities bid for at each profit rate/spread. The
cut off profit rate/spread is determined by increasing the profit rate/spread
to the extent that the total number of debt securities offered under the Book
Building portion are subscribed.]

(xliii) “securities” means shares and debt securities

(xliv) “Schedule” means a schedule to these Regulations;

(xlv) “Secondary Public Offering” means offer of securities to the general public
1
Inserted vide SRO 1214 (I)/2021 dated September 15, 2021
2 Inserted vide SRO 7(I)/2018 dated January 5, 2018
3 Deleted the words “(xxxvii)“Ordinance” means the Companies Ordinance, 1984 (XLVII of 1984);” vide SRO 838(I)/2017
dated August 23, 2017
4 Inserted vide SRO 819(I)/2020 dated September 7, 2020

Page 6 of 130
 subsequent to IPO;
1
[(xlvi) “Shariah Advisor” means an individual, a Limited Liability Partnership
(LLP) or a company who/that meets the fit and proper standards specified
by the Commission;]
2
[(xlvii) “Shariah Compliant Security” means a security structured on the basis of
any of the Shariah concepts;]
3
[(xlviia) “Shariah concepts” for the purpose of these Regulations includes Ijarah,
Musharakah, Murabahah, Modaraba, Salam and any other concept allowed
by the Shariah Advisor;]
4
[(xlviii) “Shariah certificate” for the purpose of these Regulations means a Shariah
pronouncement, a fatwa or Shariah opinion signed by Shariah Advisor in
such form and manner as notified by the Commission from time to time;]
5
[(xlix) “Shelf Registration” means an arrangement that allows the Issuer to make
offering in multiple tranches through a single offering document i.e.
Prospectus;]

(l) “Supplement to the shelf prospectus” means an updated condensed form of

the full prospectus for inviting public subscription through subsequent
tranche(s);

(li) “Step Bid” 6[in case of shares] means a series of Limit Bids at increasing
prices provided that Bid Amount of any step is not less than 7[one] million
rupees under the Book Building method;
8
[(lia) “Step Bid” in case of debt securities means a series of Limit Bids at different
profit rates/spreads provided that Bid Amount of any step is not less than
one million rupees under the Book Building method;]

(lii) “Strike Price” means the price per share determined on the basis of Book
Building process;
9
[(liii) “Special Purpose Vehicle (SPV)” for the purpose of these regulations means
a public limited company or a body corporate registered with the
Commission under the Companies (Asset Backed Securitization) Rules,
1999;]

1 Substituted for the words “(xlvi) “Shariah Advisor” means a firm or a company who/that meets the fit and proper standards
specified by the Commission or the State Bank of Pakistan for Shariah advisory services.” Vide SRO 838(I)/2017 dated August
23, 2017
2 Substituted for the words “(xlvii) “Shariah Compliant Security” means a security structured on the basis of any of the Shariah
concepts including Ijarah, Musharika, Morabiha, Modaraba, Salam and any other concept allowed by the Shariah Advisor;”
vide SRO 838(I)/2017 dated August 23, 2017
3 Inserted vide SRO 838(I)/2017 dated August 23, 2017
4 Substituted for the words “(xlviii) “Shariah certificate” for the purpose of these Regulations includes a Shariah
pronouncement or fatwa by the Shariah Advisor;” vide SRO 838(I)/2017 dated August 23, 2017
5 Substituted for the text “(xlix) “Shelf Registration” means the sanctioned amount of securities to be issued in tranches over
a period of time as specified in the Prospectus. Vide SRO 819(I)/2020 dated September 7, 2020
6 Inserted vide SRO 819(I)/2020 dated September 7, 2020
7 Substituted for the word “7two” vide SRO 819(I)/2020 dated September 7, 2020
8 Inserted vide SRO 819(I)/2020 dated September 7, 2020
9 Substituted for the words “(liii) “Special Purpose Vehicle” means a special purpose vehicle as defined in the Companies
(Asset Backed Securitization) Rules, 1999;” vide SRO 838(I)/2017 dated August 23, 2017

Page 7 of 130
 1
[(liiia) “Special Purpose Acquisition Company” or “SPAC” means a Company
formed and registered under the Companies Act, 2017, having sole principal
line of business to raise money through public offering for entering into
merger or acquisition transactions;]

(liv) “Sponsor” means:

(a) a person who has contributed initial capital in the issuing company
or has the right to appoint majority of the directors on the board of
the issuing company directly or indirectly;

(b) A person who replaces the person referred to in clause (a) above; and

(c) A person or group of persons who has control of the issuing

company whether directly or indirectly.

(lv) “Sukuk” means an instrument of equal value representing undivided share

2
[ ] in ownership of the identified tangible assets, usufruct and services or
in the ownership of the assets of particular projects or special investment
activity;
3
[(lvi) “Tranche” means offer of a certain portion out of the total issue size as
disclosed in the shelf prospectus; and]

(lvii) “Valuation Section” means a section in the prospectus containing the

justifications given by the Consultant to the Issue in support of the offer
price or Floor Price set by the Issuer 4[and disclosure of post issue Free Float
as number of shares as well as in percentage].

(2) Words and expressions used but not defined in these Regulations shall have the
same meaning as are assigned to them in the Act, the 5[Companies Act], or the Securities and
Exchange Commission of Pakistan Act, 1997 (XLII of 1997).

CHAPTER II

GENERAL CONDITIONS

3. General Conditions for Public Offer of Securities.__ (1) An Issuer shall

make a public offer of securities, subject to the following general conditions, namely. –
6 7
[ [omitted]
8
[(i) the Issuer has obtained approval from its Board of Directors relating to Public
Offering.]

(ii) the Issuer has profitable track record for at least 2 preceding financial years from

1
Inserted vide SRO 1214 (I)/2021 dated September 15, 2021
2 Deleted comma “,” vide SRO 838(I)/2017 dated August 23, 2017
3 Substituted for the text “(lvi) “Tranche” means offer of a certain portion out of the total amount of securities
approved by the Commission; and” vide SRO 819(I)/2020 dated September 7, 2020
4 Inserted vide SRO 7(I)/2018 dated January 5, 2018
5 Substituted for the word “Ordinance” vide SRO 838(I)/2017 dated August 23, 2017
6 Inserted vide SRO 7(I)/2018 dated January 5, 2018
7 Deleted the text “(i) the Issuer shall have been in operations for at least 3 financial years;” vide SRO 1619 (I)/2019 dated
December 26, 2019
8 Inserted vide SRO 819(I)/2020 dated September 7, 2020

Page 8 of 130
 its core business activities;
1
[Provided that in case of non-compliance with profitability criteria, the
sponsors of the Issuer shall retain at least 51% of the post issue paid-up capital
till the company reports net profit after tax for two consecutive financial years
including profit from its core business activities;

Provided further that the issuer shall: (a) submit a business plan to
turnaround the company into a profitable venture; and (b) disclose the following
on the cover page of the Prospectus in bold language:

“This is a loss-making company. The risks associated with loss making

companies are comparatively much higher than profitable companies. The
prospective investor should, therefore, be aware of the risk of investing in such
companies and should make the decision to invest only after careful due
diligence. It is advisable to consult any independent investment advisor before
making any investment.”]

(iii) not less than 51% of the shares of the issuer are held by same persons for at least
2 preceding financial years;
2
[Provided that this clause shall not apply in case of new issuance of
shares by the issuer.
3
[Provided further that the above clauses (ii) and (iii) shall not apply in
case of: (i) Green Field Project; (ii) public offering of debt security whose debt
servicing is guaranteed from the Government. (iii) public offering of debt
security by multilateral agencies. (iv) public offering of debt security by state
owned enterprises having entity rating of BBB+ and above.]

Provided further that Commission may consider relaxing any of the

above clauses (ii) to (iii) in case of privatization of government owned entities
by Privatisation Commission through capital markets.]
4
[(iv) In case of green field project, following criteria shall be applicable:

a. Sponsors’ contribution, in the form of equity in a green field project at

the time of IPO, shall not be less than 51% of the entire equity and shall
be retained till the commencement of commercial production.

b. In case the project requires debt financing, in addition to equity funding,

financial close shall be mandatory.

c. Successful business track record of sponsors preferably running a listed

company/ies, manufacturing/industrial units etc. considering various
parameters such as operational profitability, operating cash flows, EPS

1 Inserted vide SRO 1619 (I)/2019 dated December 26, 2019

2 Inserted vide SRO 1619 (I)/2019 dated December 26, 2019
3 Substituted for the text “Provided further that the above clauses (ii) to (iii) shall not apply in case of Green Field Project;”
vide SRO 819(I)/2020 dated September 7, 2020
4 Substituted for the text “(iv) its book value per share is not less than its face value per share;
Provided that clause (iii) above shall not apply in case of new issuance of shares;
Provided further that the above clauses (i) to (iv) shall not apply in case of Green Field Project; and” vide SRO 1619 (I)/2019
dated December 26, 2019

Page 9 of 130
 and dividend payout etc.

d. Experience and skills of the Management to run the proposed project.

e. If required, Engineering, Procurement and Construction (EPC) contract

shall be in place.

f. Land for the project, if required is acquired by the Issuer and the same
is in the name of the issuer.

g. the sponsors of the Issuer shall retain at least 51% of the post issue paid-
up capital till the company reports net profit after tax for two consecutive
financial years including profit from its core business activities.

h. The Issuer shall disclose the following on the cover page of the
Prospectus in bold language:

“It is a green field project. The risks associated with the green field
project are much higher than a project that has commenced commercial
production/operations. The prospective investor should, therefore, be
aware of the risk of investing in such projects and should make the
decision to invest only after careful due diligence. It is advisable to
consult any independent investment advisor before making any
investment.”]

(v) The securities shall be issued in book-entry form only;]

(2) No Issuer shall make a public offer if

(i) the Issuer, its sponsors, promoters, substantial shareholders 1[and ] directors 2[
] have over dues or defaults, irrespective of the amount, appearing in the report
obtained from the credit information bureau; and
3
[Provided that the clause (i) above shall not apply to the nominee
director of the government and financial institution/ creditor.

Provided further that the clause (i) shall not apply to independent
director.]

(ii) the Issuer or its directors, sponsors or substantial shareholders have been
holding the office of the directors, or have been sponsors or substantial
shareholders in any company,

(a) which had been declared defaulter by the securities exchange or futures
exchange; or

(b) whose TRE certificate has been cancelled or forfeited by the securities
exchange; or

(c) which has been de-listed by the securities exchange due to non-

1 Inserted vide SRO 1619 (I)/2019 dated December 26, 2019

2 Deleted the words “and associates” vide SRO 1619 (I)/2019 dated December 26, 2019
3 Inserted vide SRO 819(I)/2020 dated September 7, 2020

Page 10 of 130
 compliance of its regulations.

Provided that Commission may grant relaxation upon reasons to

be recorded, and rectification of cause leading to such delisting
1
[(3) The Issuer shall appoint Consultant to the Issue, Book Runner, Underwriter,
Balloter and Share Registrar and Banker to an Issue, where required, through separate
agreements in writing.

Provided that appointment of consultant to the Issue shall not be mandatory in case of
initial public offering of other class of shares by listed companies.

Provided further that the Commission may consider relaxing the appointment of
Consultant to the Issue in case of privatization of government owned entities by Privatization
Commission through capital markets

Provided further, that in case the Consultant to the Issue is not appointed by the Issuer
than a specific disclosure in this context shall be made on the Cover page of the Prospectus.

Provided further, that scheduled bank, investment finance service license holder and
development financial institution can only act as Consultant to the Issue in case of public
offering of debt securities.

Provided further, that sub-regulation (3) shall not apply to the extent if the issue or offer
of securities is made simultaneously both in domestic and international markets.]

(4) The Consultant to the Issue, Book Runner and Underwriter and their associates
shall not publish any research report by whatever name called in respect of the Issuer or Issue
from the date of their appointment as Consultant to the Issue, Book Runner and Underwriter
2
[till] the date of allotment of securities to the general public 3[:

Provided that information memorandum and other marketing material may be prepared
and shared with the prospective investors through private arrangement.]

(5) Subsequent to the underwriting agreement with the issuer, the underwriter to
the issue may enter into separate agreements with other underwriters 4[duly licensed by the
Commission], with the consent of the issuer 5[and any such arrangement shall be disclosed in
the Prospectus in case of fixed price method and in supplement to the Prospectus in case of
book building method].

(6) The Consultant to the Issue may enter into separate agreements with any expert
for performance of its duties;

Provided that the said agreement(s) shall not absolve the Consultant to the Issue from

1 Substituted for the text “1[(3) The Issuer shall appoint Consultant to the Issue, Book Runner, Underwriter, Balloter and Share
Registrar and Banker to an Issue, where required, through separate agreements in writing. The Book Runner, Underwriter and
Balloter and Share Registrar shall be independent of the Issuer in case of issuance of equity securities.
Explanation: For the purpose of this clause, Independent means that the above regulated persons do not have any conflict of
interest and relationship or connection whether pecuniary or otherwise including but not limited to shareholding, directorship
and employment etc. with the issuer, its associated companies and other regulated persons involved in Public offering process:
Provided that sub-regulation (3) shall not apply to the extent if the issue or offer of securities is made simultaneously both in
domestic and international markets.]” vide SRO 819(I)/2020 dated September 7, 2020
2 Substituted for the word “to” vide SRO 7(I)/2018 dated January 5, 2018
3 Substituted for the semi colon “;” vide SRO 7(I)/2018 dated January 5, 2018
4 Inserted vide SRO 7(I)/2018 dated January 5, 2018
5 Inserted vide SRO 7(I)/2018 dated January 5, 2018

Page 11 of 130
its obligations as specified in these Regulations and the agreement entered with the Issuer.

(7) Issuer shall ensure that Centralized E-PO System (CES) is available for the
general public

(8) The Issuer 1[itself or] through its Consultant to the Issue, 2[if any] shall submit
an application along with draft prospectus for listing of its securities to the securities exchange
under section 19 of the Act read with the relevant regulations of the securities exchange. The
copy of the said application along with draft prospectus shall also be sent to the Commission
for its record;

(9) The Issuer while submitting draft prospectus to the securities exchange shall
comply with the following requirements with respect to the contents of the draft prospectus
and advertisement;
3
[(i) Prepare the draft prospectus as per the format and disclosures prescribed in First
Schedule and should be translated into Urdu in addition to English version.]

(ii) Prepare the draft abridge prospectus, if any, 4[as per the disclosures] prescribed
in Second Schedule.

(iii) Prepare the draft advertisement, if any, 5[as per the disclosures] prescribed in
Third Schedule.

(iv) Prepare the draft supplement to the prospectus, in case of shelf registration, 6[as
per the disclosures] prescribed in Fourth Schedule.
7
[(9a) The Issuer and Consultant to the Issue, if any shall ensure that all applicable
disclosures as prescribed under First Schedule are made in the draft prospectus.

(9b) In case, some disclosures are not applicable to a particular issue, the Issuer and
Consultant to the Issue, if any shall report the same to the Commission along with rationale.]

(10) The language of the draft prospectus should be simple, plain, clear, precise and
easily understandable.

(11) The draft prospectus as submitted by the Issuer shall be placed by the securities
exchange on its website for a period of seven working days and the same shall be notified by
the securities exchange to its members, for seeking public comments. The draft prospectus shall
also be placed on the website of the Issuer and Consultant to the Issue8[, if any];

(12) The securities exchange shall ensure that all comments received on the draft
prospectus have been incorporated and suitably addressed by the Consultant to the Issue and
the Issuer to the satisfaction of the securities exchange.
9
[Provided that in case where Consultant to the Issue is not appointed, the Issuer, itself

1 Inserted vide SRO 819(I)/2020 dated September 7, 2020

2 Inserted vide SRO 819(I)/2020 dated September 7, 2020
3 Substituted for the text “(i) Prepare the draft prospectus in the format as prescribed in First Schedule and should be translated
into Urdu in addition to English version.” Vide SRO 819(I)/2020 dated September 7, 2020
4 Substituted for the words “in the form as” vide SRO 819(I)/2020 dated September 7, 2020
5 Substituted for the words “in the form as” vide SRO 819(I)/2020 dated September 7, 2020
6 Substituted for the words “in the form as” vide SRO 819(I)/2020 dated September 7, 2020
7 Inserted vide SRO 819(I)/2020 dated September 7, 2020
8 Inserted vide SRO 819(I)/2020 dated September 7, 2020
9 Inserted vide SRO 819(I)/2020 dated September 7, 2020

Page 12 of 130
shall address the comments received on the draft prospectus.]
1
[(13) While processing any application submitted by the Issuer 2[itself or through its]
Consultant to the Issue3[, if any] under section 19 of the Act for its approval, the securities
exchange, in addition to any other requirements, shall examine the proposed issue from various
aspects including eligibility requirements and suitability of the Issuer or security for listing
considering the interest of general public and its benefits to the capital market. In order to assess
the suitability aspect, the securities exchange shall ensure that the Issuer has made all such
disclosures as are necessary to comply with the requirements of sub-section 4(a) of Section 20
read with Section 22 of the SECP Act, 1997. The securities exchange may ask for any
additional information as required.]
4
[(14) The securities exchange shall communicate its approval or reasons for rejection
of the application to the Consultant to the Issue, if any, the Issuer and the Commission.]
5
[(15) After obtaining the approval of the securities exchange, the Issuer itself or
through its Consultant to the Issue, if any, shall submit an application along with the documents
prescribed in Eight Schedule to the Commission for its approval under section 87 and 88 of the
Act. The application shall be accompanied by the processing fee as prescribed in Fifth
Schedule.]
6
[(15a) Any change in the Prospectus subsequent to its approval by the
Commission and prior to its publication, may be made only with prior written approval of the
securities exchange and the Commission.”; and

(15b) Any change in the Prospectus subsequent to its publication, may be made only
with the prior written approval of the securities exchange and the Commission and such change
shall be disseminated to the public through publication of addendum to the Prospectus in at
least all those newspapers, websites in which the Prospectus has been published earlier]
7
[(16) In case application for listing is refused by the securities exchange, the Issuer
itself or through its Consultant to the Issue, if any, may file a petition before the Commission
within thirty days of such refusal.]

(17) A company may issue securities outside Pakistan subject 8[to] prior approval of

1 Substituted for the text “(13) While processing any application submitted by the Issuer through the Consultant to the Issue
under section 19 of the Act for its approval, the securities exchange, in addition to any other requirements, shall examine the
proposed issue from various aspects including eligibility requirements and suitability of the Issuer or security for listing
considering the interest of general public and its benefits to the capital market. In order to assess the suitability aspect, the
securities exchange may ask for any additional information from the Issuer and the Consultant to the Issue including financial
projections, future strategies of the Issuer, experts’ reports, etc.
Explanation: The term suitability with regard to listing of securities includes assessing various risks involved such as sector
risk, operational risk, legal risk, etc, track record of sponsors, quality and capability of the management, past financial
performance of the Issuer, future strategies of the Issuer, dividend payout history, financial projections, financial viability,
dividend policy, etc.” vide SRO 1619 (I)/2019 dated December 26, 2019
2 Substituted for the words “through the” vide SRO 819(I)/2020 dated September 7, 2020
3 Inserted vide SRO 819(I)/2020 dated September 7, 2020
4 Substituted for the text “(14) The securities exchange shall communicate its approval or reasons for rejection of the
application to the Consultant to the Issue with a copy to the Issuer and Commission. 4[ ]” vide SRO 819(I)/2020 dated
September 7, 2020
5 Substituted for the text “(15) After obtaining the approval of the securities exchange, the Issuer through the
Consultant to the Issue shall submit an application 5 [along with the documents prescribed in Eight Schedule] to the
Commission for its approval under section 87 and 88 of the Act. The application shall be accompanied by the processing fee
as prescribed in Fifth Schedule.” Vide SRO 819(I)/2020 dated September 7, 2020
6 Inserted vide SRO 7(I)/2018 dated January 5, 2018
7 Substituted for the text “(16) In case application for listing is refused by the securities exchange, the Issuer through the
Consultant to the Issue may file a petition before the Commission within thirty days of such refusal.” Vide SRO 819(I)/2020
dated September 7, 2020
8 Inserted vide SRO 1619 (I)/2019 dated December 26, 2019

Page 13 of 130
the Commission under section 95 of the Act and payment of non-refundable fee of one million
rupees and submission of such documents as prescribed in Sixth Schedule.

(18) Securities of any company established outside Pakistan can be offered for sale
to the public under sections 87 and 88 of the Act read with 1 [section 446 and 447 of the
Companies Act].

Provided such foreign company is compliant with the provision of Part 2[XII of the
Companies Act], these Regulations and meets requirements of regulations of the securities
exchange for listing of companies and securities.
3
[(19) The securities subscription form on the format provided in Seventh Schedule
shall be made part of the Prospectus.
4
[(20) the Issuer, the Consultant to the Issue, the Underwriter, the Book Runner and
the Designated institution shall maintain record of the issue for a period of at least ten years
from the closing of the public subscription.]

(21) The offer size and allocation of capital to the general public shall be as per the
requirements of the relevant regulations of the securities exchange.]

CHAPTER III

Public Offer of Shares

4. Methods for public offer of shares: An Issuer including an Offeror may make
public offer of shares as per any of the method given below:

(1) Fixed Price Method: Under the fixed price method, the offer price is set by the
Issuer in consultation with the Consultant to the Issue.

(2) Book Building Method: Book building is a mechanism of price discovery of

shares through 5 [Bidders who make Bids at Floor Price or within the Price Band]. Bids
received are listed in descending order of price evidencing demand at different price levels 6[at
Floor Price or within the Price Band] . A Strike Price is arrived at through Dutch Auction
Method.

5. Conditions for public offer of Shares.- An Issuer shall comply with the
following conditions, namely,-

(1) The sponsors of the Issuer shall retain their entire shareholding in the company
for a period of not less than twelve months from the last date for public subscription or in case
of green field projects from the date of commencement of commercial operations or production
by the company, whichever is later;

(2) The sponsors of the Issuer shall retain not less than twenty five percent of the
paid up capital of the company for not less than three financial years from the last date for the
public subscription or, in case of green field projects, from the date of commencement of

1 Substituted for the words “Sections 461 and 462 of the Ordinance” vide SRO 838(I)/2017 dated August 23, 2017
2 Substituted for the words “XIV of the Ordinance” vide SRO 838(I)/2017 dated August 23, 2017
3 Inserted vide SRO 7(I)/2018 dated January 5, 2018
4 Substituted for the text “(20) The percentage utilization of the excess IPO proceeds, in case the Strike Price is determined
above the Floor Price.” Vide SRO 819(I)/2020 dated September 7, 2020
5 Substituted for the words “bidders who make bids not below the Floor Price” vide SRO 7(I)/2018 dated January 5, 2018
6 Substituted for the words “at or above the Floor Price” vide SRO 7(I)/2018 dated January 5, 2018

Page 14 of 130
commercial operations or production by the company, whichever is later;
1
[Provided that sub regulation (1) and (2) shall not apply in case of: (i) secondary public
offering; and (ii) initial public offering of other class of shares by listed companies.]

(3) The shares of the sponsors mentioned at (1) and (2) above shall be kept
unencumbered in a blocked account with central depository;

(4) Subject to compliance with sub-regulation (1) and (2) above, and with the
approval of the securities exchange, the sponsors of the Issuer may sell their shareholding
through block-sale to any other person who shall be deemed sponsor for the purposes of these
Regulations. Any such person and its directors, sponsors and substantial shareholders shall
comply with conditions as stipulated in sub regulation (1) of regulation 3 above;

(5) The issuer may allot shares on account of preferential allocation to its
employees at the same price at which shares are offered to the general public;

(6) In case of public offer of shares for a green field project, balancing,
modernization and replacement or expansion,-

(i) The public offer of shares shall be in accordance with the financial plan
approved by the board of directors of the Issuer. The financial plan shall be
disclosed in the prospectus along with rationale for variations, if any;
2
[omitted]

CHAPTER IV

Offer of shares through fixed price method

6. Conditions for public offer of shares through fixed price method.- In

addition to the conditions as mentioned at regulation 5 above, an Issuer shall comply with the
following conditions, namely,-
3
[(1) The Issuer shall decide the offer price in consultation with the Consultant to the
Issue, if any. The Consultant to the Issue, if any or the Issuer shall provide
explanations in support of the offer price under a separate section titled as
“Valuation Section” of the prospectus.]

(2) The public offer under the fixed price method shall be fully underwritten.

1 Inserted vide SRO 819(I)/2020 dated September 7, 2020

2 Deleted the text “(ii) the Issuer shall before making the offer of shares to the public, provide the Commission a certificate
from Consultants to the Issue confirming that,-
(a) viability of the financial plan as disclosed in the prospectus has been carried out considering overall fund raising avenues,
proceed utilization, time involved etc.
(b) various components of financial plan have been verified by the auditors;
(c) shares allocated to sponsors, foreign and local investors, if any, have been fully paid for;
(d) land for the project, where required, has been acquired and is in the name of Issuer; and
(e) irrevocable letter(s) of credit, where required, has been opened.
(iii) the Consultant to the issue shall verify implementation status of the project, as disclosed in the prospectus, by obtaining a
report from an independent valuer; and
(iv) The Issuer shall submit, progress report on implementation of the project on quarterly basis till commencement of the
commercial production or operations of the project, to the Commission for information and the securities exchange for public
dissemination.” Vide SRO 1619 (I)/2019 dated December 26, 2019
3 Substituted for the text “(1) The Issuer shall decide the offer price in consultation with the Consultant to the Issue. The
explanations given by the Consultant to the Issue in support of the offer price set by the Issuer shall be provided under a
separate section titled as “Valuation Section” of the prospectus.” Vide SRO 819(I)/2020 dated September 7, 2020

Page 15 of 130
 (3) An issuer shall issue shares to the general public at the price not higher than the
price at which the shares were issued to investor during the period of six months
prior to the date of public subscription.
1
[(4) After approval of the prospectus by the Commission, the Issuer itself or through
its Consultant to the Issue, if any shall seek from the securities exchange the
dates for the publication of prospectus and the subscription period.]

(5) Non-compliance with any of the condition imposed by the securities exchange
and the Commission while granting approval for issuance, circulation and
publication of the prospectus shall be considered as violation of the prospectus
and the Act.
2
[(6) After inserting the dates of the subscription period, the copy of the approved
Prospectus shall be placed on the website of the Issuer, the securities exchange
and the Consultant to the Issue, if any.]

(7) The prospectus shall be issued, circulated and published not less than seven
days and not more than thirty days before the commencement of the
subscription period for the retail portion of the Issue.

(8) The prospectus or abridged prospectus, as approved by the Commission shall

be published in at least one English and one Urdu Newspaper.

(9) The general public shall submit application for the subscription of shares to the
Banker to an Issue either in physical form or electronically. The application
shall be duly accompanied by a crossed cheque or demand draft or pay order in
the name of the Issuer or evidence of direct debit of subscription money from
the applicant’s bank account or blocking of the subscription money in the
applicant’s bank account.

(10) Within 3[10 working] days of the close of public subscription period or such
shorter period of time as may be specified by the Commission from time to
time, the shares shall be allotted and issued against the accepted and successful
applications and the subscription money of the unsuccessful applicants shall be
unblocked/ refunded.
4
[(11) The company whose shares are offered through fixed price method shall not be
provisionally listed.]

CHAPTER V

Public Offer of shares through book building method

7. Conditions for offer of shares through Book Building: In addition to the

conditions as mentioned at regulation 5 above, the Issuer shall comply with the following

1 Substituted for the text “(4) After approval of the prospectus by the Commission, the Consultant to the Issue shall seek from
the securities exchange the dates for the publication of prospectus and the subscription period.” Vide SRO 819(I)/2020 dated
September 7, 2020
2 Substituted for the text “(6) Consultant to the Issue shall immediately place a copy of the approved Prospectus on its website
and the websites of the Issuer and the securities exchange after inserting dates of the subscription period.” Vide SRO
819(I)/2020 dated September 7, 2020
3 Substituted for the figure “7” vide SRO 7(I)/2018 dated January 5, 2018
4 Substituted for the text “(11) The Issuer, the Consultant to the Issue and the Underwriter shall maintain record of the issue
for a period of at least ten years from the closing of the public subscription.” Vide SRO 819(I)/2020 dated September 7, 2020

Page 16 of 130
conditions, namely:

(1) The offer Size is not less than twenty five million shares and two hundred fifty
million rupees or such higher number of shares and amount as may be specified
by the Commission from time to time;

(2) The company whose shares are issued through Book Building shall not be
provisionally listed.

(3) Maximum seventy-five percent of the offer size is allocated to book building
portion and the remaining minimum twenty-five percent to the retail investors.
The retail portion of the public offer shall be fully underwritten.
1
[Omitted]

Provided further that the Commission may allow undertaking of book

building process and subscription by retail investors simultaneously, subject to
the condition that the Consultant to the Issue, the Book Builder and the Issuer
shall satisfy the Commission that the necessary arrangements in terms of IT
infrastructure, underwriting for the retail portion, distribution network, etc are
in place for simultaneously undertaking book building and retail subscription;

(4) The bidders may be allowed to place bids for hundred percent of the offer size
and the strike price shall be the price at which the hundred percent of the offer
size is subscribed. However, the successful bidders would be allotted and issued
only seventy-five percent of the offer size and the remaining twenty five percent
would be offered to the retail investors. The bidders shall give an undertaking
along with the application that they would subscribe to the unsubscribed shares,
if any, by the retail investors and their remaining bid money would remain
deposited/ blocked till allotment of unsubscribed shares by the retail investors,
if any, to them on pro-rata basis. In case the retail portion is fully subscribed,
the bid money shall be immediately refunded or unblocked. In this case, the
retail portion may not be underwritten.
2
[Omitted]

(6) Book building portion shall be 3 [credit] underwritten by one or more book
runners.

(7) The Issuer and the Consultant to the Issue4[, if any] shall provide names and
Unique Identification Numbers of all their associates, if any, to the Book

1 Deleted the words “Provided that in case retail portion of the offer size is oversubscribed, the portion allocated to book
building investors at strike price shall be allotted to the retail investors in the manner given below:
# Times retail portion oversubscribed Percentage of the offer size to be allotted to retail investors
out of book building portion on proportionate basis
1 10 to 20 times 10%
2 21 to 30 times 15%
3 31 times or more 30%
” Vide SRO 7(I)/2018 dated January 5, 2018

2 Deleted the words “(5)The Book Building Portion may comprise of hundred percent of offer size without any offer to retail
investor provided that shares offered through 100% book building shall only be traded among institutional investors and high
net worth individuals on a special board other than the main ready board of the securities exchange. The Commission may
impose any other conditions on case to case basis.” Vide SRO 7(I)/2018 dated January 5, 2018
3 Inserted vide SRO 819(I)/2020 dated September 7, 2020
4 Inserted vide SRO 819(I)/2020 dated September 7, 2020

Page 17 of 130
 Runner; at least three working days before the commencement of the Bidding
Period. The book runner shall enter the names and UIN number of associates of
the Issuer, the associates of the Consultant to the Issue and its associates, if any
in the book building system in order to ensure compliance with these
regulations.
1
[(8) The associates of the Issuer as disclosed in the Prospectus shall not in aggregate
make bids in excess of ten percent of the shares offered though Book Building.]
2
[(9) The associates of the Consultant to the Issue and Book Runner shall not in
aggregate make bids in excess of 3[ten percent] of the shares offered through
Book Building:

Provided that sub-regulation (9) shall not apply to such associates of the
Consultant to the Issue and the Book Runner that are Financial Institutions 4[,]
Mutual Funds 5[and Insurance Companies].]

(10) The consultant to the issue shall ensure that the issuer has entered into a tripartite
agreement in writing with the Designated Institution and the Book Runner. The
said agreement shall specify inter-alia, the rights, privileges, duties,
responsibilities and obligations of each party to the agreement and shall provide
a clause on dispute resolution mechanism among the parties to the agreement.
6
[Provided that in case where there is no consultant to the Issue, the
Issuer itself shall ensure that tripartite agreements contain the required content
as prescribed above.]

(11) The Issuer, the Consultant to the Issue, the Book Runner, the Underwriter and
the Designated Institution shall maintain record of the issue for a period of at
least ten years from the closing of the public subscription.

8. Procedure for public offer of shares through Book Building.- The following
procedure shall be adopted for book building process:
7
[(1) The Issuer shall decide the Floor Price and the Price Band in consultation with
the Consultant to the Issue, if any.

Provided that the upper limit of the Price Band should not be more than
40% of the Floor Price. The Floor Price and its determination shall be disclosed
under a separate section titled as “Valuation Section” in the prospectus. The
Consultant to the Issue, if any or the Issuer shall Justify the Floor price.]

1 Substituted for the words “(8) The associates of the Issuer as disclosed in the prospectus shall not in aggregate make bids for
shares in excess of five per cent of the Book Building Portion;” vide SRO 7(I)/2018 dated January 5, 2018
2 Substituted for the words “(9) The associates of the Consultant to the Issue and the Book Runner shall not in aggregate make
bids for shares in excess of two per cent of the Book Building Portion;” vide SRO 7(I)/2018 dated January 5, 2018
3 Substituted for the words “five percent” vide SRO 1619 (I)/2019 dated December 26, 2019
4 Substituted for the word “and” vide SRO 1619 (I)/2019 dated December 26, 2019
5 Inserted vide SRO 1619 (I)/2019 dated December 26, 2019
6 Inserted vide SRO 819(I)/2020 dated September 7, 2020
7 Substituted for the text “(1) The Issuer shall decide the Floor Price 7[and the Price Band] in consultation with the Consultant
to the Issue.
7[Provided that the upper limit of the Price Band should not be more than 40% of the Floor Price.]
The Floor Price and its determination shall be disclosed under a separate section titled as “Valuation Section” in the prospectus
containing the justifications given by the Consultant to the Issue in support of the Floor Price set by the Issuer 7[along with
post issue Free Float disclosure].” Vide SRO 819(I)/2020 dated September 7, 2020

Page 18 of 130
 (2) After approval of the prospectus by the Commission, the 1 [Issuer itself or
through its] Consultant to the Issue 2 [, if any] shall seek from the securities
exchange the dates for the publication of prospectus and the Bidding Period.

(3) Non-compliance with any of the condition imposed by the securities exchange
and the Commission while granting approval for issue, circulation and
publication of the prospectus shall be considered as violation of the prospectus
and the Act.

(4) The prospectus and abridged prospectus as approved by the Commission shall
be published in at least one English and one Urdu Newspaper.

(5) The prospectus shall be issued, circulated and published not less than seven days
and not more than thirty days before the commencement of the subscription
period for the retail portion of the Issue.
3
[(6) After inserting the dates of the Bidding period, the copy of the approved
Prospectus shall be placed on the website of the Issuer, the Book Runner, the
Designated Institution, the securities exchange and the Consultant to the Issue,
if any.]
4
[6(a) The Issuer shall publish the Prospectus at least one day before the
commencement of registration of bidders by the Book Runner]

(7) The bidding shall be conducted electronically through the System in a fair,
efficient and transparent manner.
5
[(8) Save as provided in regulation 3(15)(a) and (b), Floor price shall not be revised
once the Prospectus has been approved by the Commission.]

(9) The registration of bidders by the Book Runner shall commence at least three
working days before the start of the bidding period and shall remain open till
03:00 pm on the last date of the bidding period.

(10) The Book Runner shall at least establish bid collection centers in Islamabad, all
the provincial capitals, Azad Kashmir and Gilgit/ Baltistan. The Book Runner
may also designate any of the Bankers to an Issue as its collection agent.

(11) The Book Runner shall provide a mechanism for registration of the bidders at
the bid collection centers and collection agents.

(12) The Book Runner shall make all necessary arrangements for receiving bids and
the instruments evidencing payment of the bid money

(13) The Book Runner shall put in place a mechanism to enter details including the
maximum Bid amount of the Bidders into the System

1 Inserted vide SRO 819(I)/2020 dated September 7, 2020

2 Inserted vide SRO 819(I)/2020 dated September 7, 2020
3 Substituted for the text “(6) Consultant to the Issue shall immediately place copy of the approved Prospectus on its website
and the websites of the Book Runner, the Designated Institution, the Issuer and the securities exchange after inserting dates of
the Bidding Period.” Vide SRO 819(I)/2020 dated September 7, 2020
4 Inserted vide SRO 7(I)/2018 dated January 5, 2018
5 Substituted for the words “(8) Floor Price shall not be revised upward once the Prospectus has been approved.” Vide SRO
7(I)/2018 dated January 5, 2018

Page 19 of 130
 (14) Once details of the bidders are entered into the System, the Designated
Institution shall assign and communicate password and user ID to the bidders
enabling them to directly place the bid and revise the bid 1[ ], if required.
2
[(15) The bidding shall remain open for at least one working day.]

(16) The Book Building process shall be considered as cancelled if the Issuer does
not receive bids for the number of shares allocated under the Book Building
Portion and the same shall be immediately intimated by the Book Runner and
Consultant to the Issue to the Commission, the securities exchange, the
Designated Institution and the bankers to an issue. All the Bankers to an Issue
shall be advised by the book runner for refund/ unblocking of the Bid Money of
the bidders. The margin money shall be unblocked/ refunded to the bidders,
where required, immediately but not later than three working days of the closing
of the Bidding Period;

(17) The Book Building process shall be considered as cancelled if the total number
of bids received is less than 3[forty]; and

(18) The Book-Runner shall ensure that subscription money received against the bids
accepted shall not be released to the Issuer by the Banker to the Book Building
Portion until:

(i) credit 4[ ] of all shares allocated under the retail portion of the issue;
and

(ii) issuance of NOC by the securities exchange in case the company is

already listed or formal trading of the company in case of new listing.

9. Procedure for bidding.__ The following procedure shall be followed for

bidding:

(1) Bids can be placed 5[as] ‘Limit 6[Bid]’ or a ‘Step Bid’ either electronically or
with the bid collection centers and collection agent.

Provided that the minimum size of a limit bid and that of any step, in case of a
Step Bid, shall not be less than 7[one] million rupees;

(2) The book runner shall vet the bid applications and accept only such bid
applications that are duly filled in and supported by a crossed cheque or demand
draft or pay order or confirmation from the Banker to an Issue that Bid Money
has been electronically debited from the bidder account or is blocked in the
bidder account;

(3) In case of institutional investors, the book runner may accept bid applications
with minimum 25% margin money.

1 Deleted the words “upward only” vide SRO 819(I)/2020 dated September 7, 2020
2 Substituted for the text “(15) The bidding shall remain open for at least two consecutive working days.” Vide SRO
819(I)/2020 dated September 7, 2020
3 Substituted for the word “hundred” vide SRO 1619 (I)/2019 dated December 26, 2019
4 Deleted the words “or dispatch” vide SRO 7(I)/2018 dated January 5, 2018
5 Substituted for the words “at a” vide SRO 819(I)/2020 dated September 7, 2020
6 Substituted for the word “Price” vide SRO 819(I)/2020 dated September 7, 2020
7 Substituted for the word “7two” vide SRO 819(I)/2020 dated September 7, 2020

Page 20 of 130
 1
[Provided that the book runner may waive this margin requirement for
institutional investors at its own discretion.]

(4) On receipt of bid application, the Book Runner shall enter the Bid into the
System and issue to the bidder an electronic receipt bearing name of the book
runner, name of the bidding center, date and time;

(5) The bidding shall commence from 09:00 a.m. and close at 05:00 p.m. on all
days of the Bidding Period. The bids shall be collected and entered into the
system by the Book-Runner till 05:00 p.m. on the last day of the bidding period;

(6) The bidders can revise the bids upward till 05:00 p.m. on the last day of the
Bidding Period;

(7) The Book Runner may reject any bid application for reasons to be recorded in
writing provided the reason of rejection is disclosed to such bidder. Decision of
the Book Runner shall not be challengeable by the bidder.

(8) The Designated Institution shall through the System display live throughout the
bidding period an order book in descending order showing demand for shares
at various prices and the accumulated number of shares bid for along with
percentage of the total shares offered. The order book should also show the
revised bids. The order book shall be accessible through websites of the
Designated Institution, Book Runner, the Consultant to the Issue, securities
exchange, clearing house and the central depository;

(9) At the close of the bidding period, Strike Price shall be determined on the basis
of Dutch Auction Method by the Designated Institution;

(10) The bidders who have made bids at prices above the Strike Price shall be
allotted shares at the Strike Price;

(11) In case the bids received are sufficient to allot the total number of shares offered
for sale under the Book Building Portion, the allotment shall be made on the
basis of highest bid priority that is the bid made at the highest price shall be
considered first for allotment of shares.
2
[(12) In case all the bids made above the Strike Price are accommodated and shares
are still available for allotment, such available shares shall be allotted against
the bids made at the Strike Price on proportionate basis]

(13) The bidders who have made bids below the Strike Price shall not qualify for
allotment of securities and the book runner shall intimate their respective banks
for unblocking their Bid Money within one working day of the close of the
bidding period;

(14) Within one day of the closing of the bidding period, successful bidders shall be
intimated the Strike Price and the number of shares provisionally allotted to

1 Substituted for the text “Provided that the book runner may waive this margin requirement for institutional investors subject
to confirmation from their respective banks or custodian banks (in case of foreign institutional investors) that an amount
equivalent to the bid money is available in the respective bank or custodian account and would be paid directly to the book
runner on its request and confirmation of allocation of shares;” vide SRO 1619 (I)/2019 dated December 26, 2019
2 Substituted for the words “(12) In case all the bids made above the Strike Price are accommodated and shares are still
available for allotment, such available shares will be allotted against the bids made at the Strike Price strictly on time priority
basis.” Vide SRO 7(I)/2018 dated January 5, 2018

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 each of them;

(15) The bid money of bidders who have undertaken to subscribe the unsubscribed
retail portion shall remain deposited or blocked till allotment of unsubscribed
retail portion, if any, to them on pro-rata basis; and

(16) The successful bidders shall be issued securities only after the end of the public
subscription, in the form of book-entry to be credited in their respective
accounts. All the bidders shall, therefore, provide number of their accounts in
the bid application; and

(17) The Designated Institution shall continue to display on its website, the data
pertaining to the Book Building and determination of the Strike Price for a
period of at least three working days after closure of the bidding period.

10. Restrictions: (1) The biding period shall not be extended except in extra
ordinary circumstances like closure of banks, failure of System, etc. In such case, Book Runner
shall apply to the Commission for extension in the Bidding Period after obtaining NOC from
securities exchange. In case extension is granted, the same shall be disseminated through
publication in all those newspapers where the prospectus was published and the website of the
issuer, consultant to the issue, book runner, the designated institution and the securities
exchange.

(2) The bidder shall not 1[ ]–

2
(i) [make] bid below the Floor Price 3[and above the upper limit of the
Price Band];
4
(ii) [make] bid for more than 5[10%] of the shares allocated under the Book
Building Portion 6[ ];

(iii) subject to the provision of clause (i) above, 7 [make] bid with price
variation of more than 10% of the prevailing indicative strike price or
such other percentage as may be specified by the Commission;
8
(iv) [make] consolidated bid;
9
(v) [make more] than one bid either severally or jointly; 10[

(vi) make downward revision both in terms of Bid Price and Bid Volume;

Provided that in case of upward revision of the Bid Price, the

number of shares Bid for i.e. Bid Volume may be adjusted ensuring that
the bid amount or bid money remains the same; or]

1 Deleted the word “make” vide SRO 7(I)/2018 dated January 5, 2018
2 Inserted vide SRO 7(I)/2018 dated January 5, 2018
3 Inserted vide SRO 7(I)/2018 dated January 5, 2018
4 Substituted for the word “a” vide SRO 7(I)/2018 dated January 5, 2018
5 Substituted for the expression “5%” vide SRO 1619 (I)/2019 dated December 26, 2019
6 Deleted the text “except for institutional investors who may make bid up to 10% of the shares allocated under the Book
Building Portion” vide SRO 1619 (I)/2019 dated December 26, 2019
7 Substituted for the word “a” vide SRO 7(I)/2018 dated January 5, 2018
8 Substituted for the word “a” vide SRO 7(I)/2018 dated January 5, 2018
9 Substituted for the word “More” vide SRO 7(I)/2018 dated January 5, 2018
10 Substituted for the words “or (vi) downward revision or withdraw the bid.” Vide SRO 7(I)/2018 dated January 5, 2018

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 1
[(vii) withdraw the Bid.]

(3) No person shall take part in the book building process, directly or indirectly
severally or jointly in any manner or engage in any act or practice which create a false and
misleading appearance of active bidding for raising or depressing strike price in the book
building process.

11. Procedure for allocation of shares to retail investors.__ The following

procedure shall be followed for allocation of shares to retail investors:
2
[(1) Within three working days of the closing of the Bidding Period, the Issuer itself
or through its Consultant to the Issue, if any shall publish supplement to the
prospectus in those newspapers in which the prospectus was earlier published
and also disseminate the same to the securities exchange, banker to an issue and
underwriter. For this clause the term supplement to the prospectus means
information relating to results of the Book Building or any other information
prescribed below that is important for the retail investors.]
3
[(1a) The supplement to the prospectus shall contain the information relating to the
Strike Price, the Offer Price, names of the underwriters of the retail portion of
the Issue if any, underwriting commission bifurcating as take up commission or
any other, commitment by the successful bidders for subscribing the
undersubscribed retail portion in case of hundred percent book building,
category wise breakup of the successful bidders along with number of shares
allocated to them, dates of public subscription and such other information as
specified by the Commission.]

(2) The issuer may offer the shares to the retail investors at a certain discount to the
strike price.

(3) The general public shall submit application for the subscription of shares to the
Banker to an Issue either in physical form or electronically. The application
shall be duly accompanied by a crossed cheque or demand draft or pay order in
the name of the Issuer or evidence of direct debit of subscription money from
the applicant’s bank account or blocking of the subscription money in the
applicant’s bank account.

(4) Within 10 4[working] days of the close of public subscription period or such
shorter period of time as may be specified by the Commission from time to time,
the shares shall be allotted and issued against the accepted and successful
applications and the subscription money of the unsuccessful applicants shall be
unblocked/ refunded.

1 Inserted vide SRO 7(I)/2018 dated January 5, 2018

2 Substituted for the text “(1) Within three working days of the closing of the Bidding Period, the Consultant to the Issue shall
publish all supplement to the prospectus in those newspapers in which the prospectus was earlier published and also
disseminate the same to the securities exchange, banker to an issue and underwriter.
Explanation: - For the purposes of this clause the expression supplement to the prospectus means information relating to the
Strike Price, the Offer Price, names of the underwriters of the retail portion of the Issue if any, underwriting commission
bifurcating as take up commission or any other, commitment by the successful bidders for subscribing the undersubscribed
retail portion in case of hundred percent book building, category wise breakup of the successful bidders along with number of
shares allocated to them, dates of public subscription and such other information as specified by the Commission.” Vide SRO
819(I)/2020 dated September 7, 2020
3 Inserted vide SRO 819(I)/2020 dated September 7, 2020
4 Inserted vide SRO 7(I)/2018 dated January 5, 2018

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 (5) In case retail portion of the issue, if any, remains unsubscribed, the unsubscribed
shares shall either be taken up by the underwriters or allotted to successful
bidders at the strike price determined in the book building process on pro-rata
basis.

CHAPTER VI

Offer for sale of shares by an Offeror

12. Offer for sale of shares by the Offeror.__ 1[(1) A person or group of
persons, holding more than ten per cent shares of a listed company or listed body corporate,
may offer such shares for sale to the public subject to the conditions that the offer size (product
of the offer price or floor price and number of shares being offered) of capital to the public
shall not be less than one hundred million rupees.]

(2) In case of offer for sale of shares of an unlisted company or unlisted body
corporate, the size of the offer of capital to be offered to the public shall be in accordance with
these Regulations and regulations of the securities exchange;
2
[Provided that offer for sale of shares by the existing shareholders of a company is not
allowed in case of green field project]

3[CHAPTER VIA
Special Purpose Acquisition Company, Functions and other Requirements

12a. Eligibility to Commence business as SPAC. __ (1) No person shall commence

business as a SPAC unless,-
(i) it is registered as a public limited company having principle line of
business of SPAC, having a paid-up capital of not less than ten million
rupees, and shall not carry out any commercial business other than the
business of SPAC; and
(ii) its promoters, sponsors, directors and chief executive officer fulfil the Fit
and Proper criteria as specified in the Ninth Schedule.

12b. Functions of SPAC – (1) A SPAC shall be responsible, -

(i) to raise and utilize funds for the sole purpose of merger or acquisition
transaction and complete the transaction within permitted time frame as
per these regulations;
(ii) to open an escrow account and maintain custodial arrangements for
escrow account at all times as required under these regulations;

1 Substituted for the text “(1) A person or group of persons, holding more than ten per cent shares of a listed company or listed
body corporate, may offer such shares for sale to the public subject to the conditions that the offer size of capital to the public
shall not be less than one hundred million rupees.
Explanation.- For the purpose of this clause, the term, “offer size ” means the product of the offer price 1[or floor price] and
the number of shares being offered;” vide SRO 819(I)/2020 dated September 7, 2020
2 Inserted vide SRO 7(I)/2018 dated January 5, 2018
3
Inserted vide SRO 1214 (I)/2021 dated September 15, 2021

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