Uniform format for information on use of IPO funds

The Securities and Exchange Board of India (Sebi) on Tuesday prescribed a uniform format in which listed companies have to disclose deviations or variations in the use of funds they raised through initial public offerings (IPOs), qualified institutional placements (QIPs), preferential issues and rights issues.

Currently, while listed entities submit the statement of deviation or variation, there is no uniformity in the formats and hence it was a need to introduce a common format for such reporting. Sebi in a circular addressed to the stock exchanges and listed entities said that the entities had to disclose the deviation in usage of funds from the quarter that will be ending on December 31, 2019.

Listed entities should disclose deviations alongside the announcement of their financial results. “The disclosure to stock exchanges shall be made by the listed entities on a quarterly basis along with the declaration of their financial results (within 45 days of end of each quarter/ 60 days from end of the last quarter of the financial year) until such funds are fully utilised or the purpose for which these proceeds have been raised has been achieved,” Sebi said. It asked the companies to also disclose the category-wise variation in the usage of funds.

The regulator also said that the deviation report by companies must be placed before the audit committee for review on a quarterly basis and then disclosed to the exchanges with comments of the audit committee on it. Sebi asked the stock exchanges to communicate provisions of the circular to listed entities and disseminate the information on their websites.