The Securities and Exchange Board of India has relaxed the mandatory merchant banker appointment requirement for qualifying private placements of debt securities under the framework permitting issuance at a face value of INR 10,000. Effective immediately, eligible issuers may proceed without a merchant banker if they meet regulatory, listing, compliance, credit quality and security conditions. The issuer must be regulated by the Securities and Exchange Board of India, Reserve Bank of India, Insurance Regulatory and Development Authority of India or Pension Fund Regulatory and Development Authority. It must have been listed on a recognized stock exchange for at least one year, have no pending fines or penalties for breaches of listing obligations, and have no payment defaults during the previous three financial years or the current financial year. An issuer must provide an auditor's certificate confirming its default record, while the stock exchange must verify its listing compliance when granting in-principle approval. Eligible debt must be unsubordinated or senior, rated at least AA-, and secured by a first or pari passu charge over identifiable issuer assets. Central public sector enterprises, public sector undertakings and statutory bodies may issue secured or unsecured debt. Where multiple ratings apply, the lowest determines eligibility. Stock exchanges will establish operational and disclosure requirements, make necessary system changes and monitor issuer compliance.
Securities and Exchange Board of India waives merchant banker mandate for eligible regulated listed issuers' private debt placements
The Securities and Exchange Board of India now allows eligible regulated and listed issuers to make qualifying private debt placements without appointing a merchant banker. The debt must generally be senior, secured and rated at least AA-, while issuers must meet listing, compliance and no-default conditions. The exemption applies immediately.