After the Initial Public Offer, the equity capital of promoters group holding in a listed company is ₹140 crore. The post issue equity capital of the company is ₹600 crore. The promoters group holding includes (acquired

As per regulation 14 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, the promoters of the issuer shall hold at least twenty per cent of the post-issue capital. Further as per regulation 15 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, for the computation of minimum promoters' contribution, the following specified securities shall not be eligible: (a) specified securities acquired during the preceding three years, if it is acquired for consideration other than cash and revaluation of assets or capitalization of intangible assets is involved in such transaction; (b) specified securities pledged with any creditor. In the present case, ₹20 crore equity capital acquired in consideration of transfer of technical know-how will not be eligible for promoters contribution, further ₹10 crore equity capital was pledged with bank will also not eligible for promoters contribution. The net promoters contribution after deduction of ₹30 crore (₹20 crore & ₹10 crore) will be ₹110 crore (140 crore - 30 crore), which is below then the prescribed limit i.e, 20% of post issued capital (₹600 x 20% = ₹120 crore), Therefore, promoters are not satisfying minimum promoters contribution requirements as per SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.