Roshni Ltd. is presently an unlisted company and is proposed to be listed on BSE. The management is of the view to allot 50,000 equity shares on qualified institutional placement basis to a foreign depository. The floor

Clause 6 of the Depository Receipts Scheme, 2014 provides that the price of permissible securities issued to a foreign depository for the purpose of issuing depository receipts shall not be less than the price if such security is issued to domestic investors. Explanation 1: A company listed or proposed to be listed on a recognised stock exchange shall not issue equity shares on preferential allotment to a foreign depository for the purpose of issue of depository receipts at a price less than the price applicable to preferential allotment of equity shares of the same class to investors under ICDR. Explanation 2: Likewise, where a listed company makes a qualified institutional placement of permissible securities to a foreign depository for the purpose of issue of depository receipts, the minimum pricing norms for such placement as applicable under the ICDR shall be complied with. Application to the given case: In the given case, Roshni Ltd., an unlisted company proposed to be listed on BSE, cannot issue shares at a price less than ₹80 per share under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. Hence, it cannot issue shares at ₹60. The minimum price regulation of SEBI (ICDR) Regulations, 2018 must be complied with. If the preferential allotment is made at ₹70 per share, the answer will remain the same because ₹70 is still below the floor price of ₹80. Therefore, in both cases, Roshni Ltd. cannot make the issue at the proposed prices.