SEBI Mandates E-Book Mechanism for Private Debt Securities Over Rs 20 Crore

The Securities and Exchange Board of India (SEBI) has made the electronic book mechanism mandatory for private placement debt issues of Rs 20 crore or more, expanding the platform's scope to include REITs and InvITs. This move aims to enhance the efficiency and transparency of the EBP platform.

SebiEbp PlatformPrivate PlacementDebt SecuritiesReitsReal EstateMay 18, 2025

SEBI Mandates E-Book Mechanism for Private Debt Securities Over Rs 20 Crore

Real Estate:NEW DELHI, May 18: The Securities and Exchange Board of India (SEBI) has introduced significant changes to the regulatory framework for private placement debt issues. Under the new rules, the electronic book mechanism (EBM) is now mandatory for all 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, as per a recent SEBI circular. The move is based on recommendations from a working group and public feedback, aimed at enhancing the efficiency and transparency of the Electronic Book Provider (EBP) platform. Previously, the EBM was mandatory for 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 infrastructure investment trusts (InvITs) and real estate infrastructure trusts (REITs), areas that lacked specific regulatory provisions until now. According to SEBI, issuers can now choose to access the EBP platform for private placement of securitised debt instruments, security receipts, commercial papers (CPs), and certificates of deposit (CDs). Additionally, issuers constituted as REITs, small and medium REITs (SM REITs), and InvITs can also use the EBP platform for private placement of units of REITs, SM REITs, and InvITs. 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. For first-time users of the EBP, the submission must be made at least three working days before the issue opens. The documents must disclose the base issue size and any green shoe option, which is capped at five times the base size. Past green shoe allocations must also be disclosed. Depending on the credit rating of the instrument, issuers can reserve a portion of the issue for anchor investors. This reservation can be up to 30% for AAA to AA-, 40% for A+/A-, and 50% for other ratings. Anchor investors must confirm their participation electronically one day before the issue. Unconfirmed amounts will be reallocated to the base issue. To ensure transparency, SEBI mandates 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 for obtaining in-principle approval from stock exchanges before T-2 or T-3 for EBP-based issues and before the issue opens for non-EBP issues. These changes will come into effect immediately, with certain clauses related to anchor investors, disclosures, and reporting to be implemented three to six months from the circular’s date. The implementation of these new rules is expected to bring greater efficiency, transparency, and regulatory oversight to the private placement market, benefiting issuers, investors, and the overall financial ecosystem.

Frequently Asked Questions

What is the new mandatory threshold for using the EBP platform for private placements? A: The new mandatory threshold for using the EBP platform for private placements is Rs 20 crore or more, including single, shelf, and subsequent issues within a financial year. Q: What types of securities are covered under the new EBP platform mandate? A: The new EBP platform mandate covers private placements of debt securities, non-convertible redeemable preference shares (NCRPS), and municipal bonds. Q: Can REITs and InvITs use the EBP platform for private placements? A: Yes, REITs and InvITs can now use the EBP platform for private placements of units of REITs, SM REITs, and InvITs. Q: What is the required disclosure for the green shoe option in the placement memorandum? A: The placement memorandum must disclose the base issue size and any green shoe option, which is capped at five times the base size. Past green shoe allocations must also be disclosed. Q: When do the new rules come into effect? A: The new rules come into effect immediately, with certain clauses related to anchor investors, disclosures, and reporting to be implemented three to six months from the circular’s date.

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