SEBI Enhances EBP Platform Framework for Greater Efficiency in Private Placements

Securities and Exchange Board of India (“SEBI”) has issued a new circular bearing no. SEBI/HO/DDHS/DDHS-PoD-1/P/CIR/2025/0000000073 dated May 16, 2025, aimed at enhancing the effectiveness and usability of the Electronic Book Provider (EBP) platform for primary issuances via private placements. This initiative comes after feedback from various stakeholders, including a dedicated working group and public consultations. The changes revise specific clauses from Chapter VI and Chapter VII of the earlier Master Circular No. SEBI/HO/DDHS/PoD1/P/CIR/2024/54 dated May 22, 2024.

Key Highlights of the Revised Framework:

Mandatory Use of EBP Platform for Certain Issuances

All private placements of debt securities and non-convertible redeemable preference shares (NCRPS), including municipal bonds, shall use the EBP platform if:

(a) A single issue (with or without green shoe) is Rs. 20 crore or more.

(b) Shelf issues in a financial year cumulatively amount to Rs. 20 crore or more.

(c) Subsequent issues that push cumulative issuance over Rs. 20 crore in a financial year.

Voluntary Use of EBP Platform Expanded

(a) Issuers may voluntarily use the EBP platform for private placement of securitized debt instruments, security receipts, commercial papers (CPs), and certificates of deposit (CDs).

(b) REITs, SM REITs, and InvITs can also use the platform for private placements of their units.

Disclosure & Documentation Timeline Adjustments

Placement Memorandum and term sheet must be submitted at least two working days prior to the issue opening. For first-time issuers, the requirement is three working days.

Green Shoe Option Restrictions and Transparency

(a) The green shoe portion cannot exceed five times the base issue size.

(b) Disclosures regarding green shoe usage in previous financial years are now mandatory.

Allotment on Pro-Rata Basis

In case of multiple bids at cut-off price or coupon, allotment will now be done on a proportionate basis, as illustrated in the newly added Annexure VI A.

Anchor Investor Allocation Limits Introduced

(a) Based on credit rating, anchor allocation shall not exceed:

·       30% for AAA/AA+ to AA- instruments

·       40% for A+/A-

·       50% for other ratings

Anchor investor details and confirmations are to be disclosed and submitted electronically by T-1 day.

The revised provisions mark a significant step in improving transparency, participation, and procedural clarity in the private placement process through the EBP platform. These amendments are expected to foster investor confidence and streamline the primary market operations across varied securities.