SEBI Mandates E-Book Mechanism for Private Debt Securities Above Rs 20 Crore
The Securities and Exchange Board of India (SEBI) has made the electronic book mechanism mandatory for private placements of debt securities worth Rs 20 crore or more, expanding its scope to include Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs).
SebiEbp PlatformPrivate PlacementDebt SecuritiesReitsReal EstateMay 18, 2025
Under the new framework, the use of the EBP platform is now mandatory for private placements of debt securities, non-convertible redeemable preference shares (NCRPS), and municipal bonds, where the issue size is Rs 20 crore or more. This includes single, shelf, and subsequent issues within a financial year. Previously, the mechanism was mandatory for all private placements of debt securities with an issue size of Rs 50 crore or more.
SEBI has also extended the scope of the EBP platform to include Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). Before this, there was no specific regulatory provision for these entities. "An issuer, if desirous, may choose to access the EBP platform for private placement of securitised debt instruments or security receipts or commercial papers (CPs), certificates of deposit (CDs) and issuers constituted as REITs, SM REITs and InvITs can also access the EBP platform for private placement of units of REITs, SM REITs and InvITs," SEBI stated on Friday.
Issuers are required to submit the placement memorandum and term sheet, containing key terms and conditions, at least two working days before the issue opens, or three working days in the case of first-time users of the EBP. The documents must disclose the base issue size and any green shoe option, which is capped at five times the base size. Additionally, past green shoe allocations must be disclosed.
Depending on the credit rating of the instrument, issuers can reserve a portion of the issue for anchor investors. The reservation limits are 30 per cent for AAA to AA-, 40 per cent for A+/A-, and 50 per cent for others. Anchor investors will have to confirm their participation electronically one day before the issue. Unconfirmed amounts will be reallocated to the base issue.
To ensure transparency, SEBI has mandated that if multiple bids are received at the same cut-off price, allotments must be made on a proportionate basis. The EBP is required to publicly update detailed bidding and issue-related information on its website by the end of the bidding day or by 1 PM the next day, depending on when the issue closes.
Revised timelines have been introduced to obtain in-principle approval from stock exchanges. For EBP-based issues, this approval must be obtained by T-2 or T-3, and for non-EBP issues, it must be obtained before the issue opens.
These changes will come into effect immediately, except for certain clauses related to anchor investors, disclosures, and reporting, which will be implemented three to six months from the circular’s date. (PTI)
Frequently Asked Questions
What is the EBP platform?
The EBP (Electronic Book Provider) platform is a regulatory mechanism introduced by SEBI for private placement of debt securities. It aims to enhance transparency and efficiency in the issuance process.
What are the new mandatory requirements for using the EBP platform?
The EBP platform is now mandatory for private placements of debt securities, non-convertible redeemable preference shares (NCRPS), and municipal bonds with an issue size of Rs 20 crore or more. This includes single, shelf, and subsequent issues within a financial year.
How has the scope of the EBP platform been expanded?
The scope of the EBP platform has been expanded to include Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). Issuers can now use the EBP platform for private placements of units of REITs, SM REITs, and InvITs.
What are the disclosure requirements for issuers using the EBP platform?
Issuers are required to submit the placement memorandum and term sheet, containing key terms and conditions, at least two working days before the issue opens. They must also disclose the base issue size, any green shoe option, and past green shoe allocations.
What are the new timelines for obtaining in-principle approval from stock exchanges?
For EBP-based issues, in-principle approval from stock exchanges must be obtained by T-2 or T-3. For non-EBP issues, the approval must be obtained before the issue opens.
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