Fifteen weeks ago, Quick Ltd. listed 200 lakh equity shares of ₹10 each on Bombay Stock Exchange which is regulated by SEBI. The stock prices are stable in the range of ₹66 to ₹85 per share. Soon after listing, it was in

There are two conditionalities that the company has failed to observe as per the SEBI (ICDR) regulations, 2009. They are related to: Pricing norms and Eligibility of allottees As per the applicable pricing norms for Quick Ltd., issue of shares on preferential basis has to be made at a price not less than the higher of the following: The price at which shares were issued by the company in its IPO OR The average of weekly high and low of the closing prices of the related shares quoted on the stock exchange during the period shares have been listed preceding the relevant date. OR The average of the weekly high and low of the closing prices of the related shares quoted on a stock exchange during the two weeks preceding the relevant date. In the case of QIB the price shall not be less than the average of the weekly high and low of the closing prices of the related shares quoted on the recognized Stock Exchange during two weeks preceding the relevant date. In the instant case, the IPO was made only fifteen weeks ago at a price of ₹90. The average of weekly high-low for fifteen week since listing is ₹76 and while that of two weeks preceding the relevant date is ₹70. Therefore, the price at which equity shares to be issued under preferential issue is ₹90. However, the company chose to issue at ₹66 which is in violation of pricing norms. However, for an FII who is one of the proposed allottees, the price can be lower than ₹90 but can't be lower than ₹70. The second violation is w.r.t. eligibility of proposed allottees. As per the lock in norms, the shareholders who have sold their shares during the six months period prior to the relevant date shall not be eligible for allotment of shares on preferential basis. In the instant case, two of the proposed allottees, namely, In & Out Share Trading Ltd. and Michael Jackson are not eligible for allotment as they have sold off partly their shareholding in the company which was allotted at the time of IPO.