A Company is planning for Initial Public Offer of its equity shares. It has decided differential pricing for retail individual investors vis-a-vis QIBs. The proposed price for retail individual investors is ₹250 and for

As per the Regulation 30 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 the issuer may offer its specified securities at different prices, subject to the following: a) retail individual investors or retail individual shareholders or employees entitled reservation made under the Regulation 33 of the SEBI (ICDR) Regulations, 2018 may be offered specified securities at a price not lower than by more than ten per cent of the price at which net offer is made to other categories of applicants, excluding anchor investors; b) in case of a book built issue, the price of the specified securities offered to the anchor investors shall not be lower than the price offered to other applicants. The proposed price for retail individual investors (RII) is ₹250 and for QIB is ₹300. The maximum discount that can be provided to RII shall not be more than ten per cent of the price at which net offer is made to other categories i.e. 300 X 10% = 30. Hence, the price for RII shall not be lower than ₹270. In the given proposal, the difference between the proposed price for RII and QIB is more than 10% as envisaged in the regulation, hence the company cannot issue securities with such proposal. If case the company proposes ₹280 to anchor investors in book building issue, such issue would not be permissible as the Regulation 30 of the SEBI (ICDR) Regulations, 2018 states that the price of the specified securities offered to the anchor investors shall not be lower than the price offered to other applicants.