The accounts of Varsha Goldmine Ltd., a listed company, for the year ended 31st March, 2014 were finalised on 31st May, 2014. The company has paid-up share capital of ₹50 lakh and free reserves of ₹100 lakh. The company

Facts of the Case Varsha Goldmine Ltd. has a paid up capital of ₹50 lakhs and free reserve of ₹100 lakhs as on the year ending 31.3.2014. It is a listed company. Now it wants to make a further public issue of ₹10 crores. The question is what are the relevant regulations as per SEBI (ICDR) Regulations, 2009. Relevant Law Regulation 27 of SEBI (ICDR) Regulations, 2009 provides for the conditions for making further public offer by a listed company while Regulation 26 provides for conditions for making IPO by a company. Regulation 27 provides that an issuer may make a further public offer if it satisfies the conditions specified in clauses (d) and (e) of Regulation 26 (1) and if it does not satisfy those conditions, it may make a further public offer (only) if it satisfies the conditions specified in Regulation 26 (2). Regulation 26 (1) (d) provides that the aggregate of the proposed issue and all previous issues made in the same financial year in terms of issue size does not exceed five times its pre-issue net worth as per the audited balance sheet of the preceding financial year. Regulation 26 (1) (e) provides for change of name within last one year and this condition does not apply to the present case. Regulation 26 (2) provides that the issue can be made through book building process and the issuer undertakes to allot at least 75% of the net offer to public, to qualified institutional buyers and to refund the full subscription money if it fails to make the said minimum allotment to QIBs. Applicability of Law to the Facts of the Case In the given case, Varsha Goldmine Ltd. is a listed company. The paid up capital and free reserves of the company as on 31.3.2014 amounted to ₹1.5 crores. The company wants to make a further issue during the year 2015-16 of ₹10 crores. It is more than 5 times the pre issue net worth as at the end of the previous financial year. Therefore, it is not complying with the condition specified in Regulation 26 (1) (d). It can make a public issue now only if it fulfils the conditions specified in Regulation 26 (2). Decision Varsha Goldmine Ltd. therefore has to do the following as per Regulation 26(2): The proposed public issue must be made through book building process. The company should undertake to allot at least 75% of the net offer to public to QIBs. The company should also undertake to refund full subscription money if it fails to make the said minimum allotment (75%) to QIBs.