Question

What are the requirements as per SEBI for the issue of debentures?

Answer 1

Requirements as per SEBI for the issue of Debentures:

1. Minimum subscription: SEBI (Issue and Listing of Debt Securities) Regulation, 2008 Regulation-12 states the minimum subscription to be collected by a company. As per SEBI, the minimum subscription for public issue of debentures is 75% of the base issue size i.e. ₹100 crores. If the minimum subscription is not received, the entire money received should be refunded within 12 days from the date of closure of the issue.
2. Retention of over subscription: Company can retain over-subscription money up to a maximum of 100% of the base issue size or any lower limit as specified in the offer letter or letter of offer or prospectus.
3. Underwriting: The company may enter into an underwriting agreement with underwriters for its public issue of debentures. Appointment of underwriters must be mentioned in the offer letter or letter of offer or prospectus.
4. Credit Rating: SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 states that companies should get a credit rating for issuing debentures.

As per SEBI, Companies making a public issue or right issue of convertible debentures must obtain a credit rating from one or more credit rating agencies. The rating should be mentioned in the offer letter or letter of offer or prospectus.