(1)

An issuer shall be eligible to make an initial public offer only if:

(2)

An issuer not satisfying the condition stipulated in sub-regulation (1) shall be eligible to make an initial public offer only if the issue is made through the book-building process and the issuer undertakes to allot at least seventy five per cent. of the net offer to qualified institutional buyers and to refund the full subscription money if it fails to do so.

(3)

[ If an issuer has issued SR equity shares to its promoters/ founders, the said issuer shall be allowed to do an initial public offer of only ordinary shares for listing on the Main Board subject to compliance with the provisions of this Chapter and these clauses -

i. the issuer shall be intensive in the use of technology, information technology, intellectual property, data analytics, bio-technology or nano-technology to provide products, services or business platforms with substantial value addition.

ii. the SR shareholder shall not be part of the promoter group whose collective net worth is more than rupees 500 crores:

Explanation.—While determining the collective net worth, the investment of SR shareholder in the shares of the issuer company shall not be considered.

iii. The SR shares were issued only to the promoters/ founders who hold an executive position in the issuer company;

iv. The issue of SR equity shares had been authorized by a special resolution passed at a general meeting of the shareholders of the issuer, where the notice calling for such general meeting specifically provided for -

a. the size of issue of SR equity shares,

b. ratio of voting rights of SR equity shares vis-à-vis the ordinary shares,

c. rights as to differential dividends, if any

d. sunset provisions, which provide for a time frame for the validity of such SR equity shares,

e. matters in respect of which the SR equity shares would have the same voting right as that of the ordinary shares,

v. The SR equity shares have been held for a period of atleast 6 months prior to the filing of the red herring prospectus;

vi. The SR equity shares shall have voting rights in the ratio of a minimum of 2:1 upto a maximum of 10:1 compared to ordinary shares and such ratio shall be in whole numbers only;

vii. The SR equity shares shall have the same face value as the ordinary shares;

viii. The issuer shall only have one class of SR equity shares;

ix. The SR equity shares shall be equivalent to ordinary equity shares in all respects, except for having superior voting rights.]