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.

Answer not available

Tags:

Related News Articles

Real Estate Mumbai

Revolutionizing India's Urban Landscape: Smart Cities and Real Estate Development

India's smart city initiatives and infrastructural development have boosted real estate activity in major urban centers, with cities like Mumbai, Delhi-NCR, and Bangalore leading the way.

August 9, 2024

Read Article

real estate news

Flex Space Operators Capitalize on Rising Demand in the Real Estate Market

As companies increasingly opt for flex spaces to optimize costs and enhance employee satisfaction, flex space operators are actively tapping into the market to secure funding and expand their operations.

December 16, 2024

Read Article

real estate news

Indian Housing Market Set for Modest Growth in 2025: Experts

India's primary housing market is expected to see a modest single-digit price rise in 2025, following a 21% appreciation in 2024. Property experts predict that increased supply and potential policy incentives will drive this trend.

January 1, 2025

Read Article

Real Estate Pune

Union Minister Murlidhar Mohol Launches CREDAI-Pune Metro Property Expo 2025

The CREDAI-Pune Metro Property Expo 2025 was recently inaugurated by Union Minister Murlidhar Mohol. This event aims to provide a platform for homebuyers and investors to explore a wide range of real estate options, from affordable to luxury properties.

January 17, 2025

Read Article

Real Estate Maharashtra

Baden Bower's Real Estate PR Tactics: A Strategic Edge for J.P. Morgan

Baden Bower's innovative real estate PR strategies, including guaranteed media placements, are giving J.P. Morgan a unique advantage in a challenging market.

March 7, 2025

Read Article

real estate news

Prime Focus Unveils Plan for Rs 3,000 Cr Film City in Mumbai

Prime Focus Technologies, a leading real estate private equity firm, has announced plans to build a state-of-the-art film city over 200 acres in Mumbai. The project is set to be a significant boost to the Indian film industry, with an initial investment of Rs 500 crore.

May 3, 2025

Read Article