On May 23, 2023, the Securities and Exchange Board of India amended the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 to effect changes to the underwriting framework applicable to public offerings. Essentially, the SEBI amendment mandates that if an issuer making a public offering through the book-built route desires to have the offering underwritten to cover any under-subscription (referred to as hard underwriting), it is required to enter into an underwriting agreement with the underwriters upfront and prior to filing the red herring prospectus and make necessary disclosures of the underwriters’ commitment in the RHP. This note discusses the key changes made by SEBI to the regulations governing hard underwriting in book-built public offerings in India.
