Mumbai, September 23
Allowing companies to allot more shares for their employees during public offers, markets regulator SEBI today increased the limit for the value of such allotments to Rs 5 lakh, up from Rs 2 lakh currently, under staff quota.
The move follows representations requesting SEBI to consider relaxing its regulations to enable employees to apply for shares beyond the limit of Rs 2 lakh per employee.
Besides, SEBI was also requested to allow under-subscription in the employee reservation portion to be allotted to employees over and above the extant limit of Rs 2 lakh on a proportionate basis.
Under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, also known as ICDR Regulations, an issuer can make reservation for employees which cannot exceed 5% of the post-issue capital of the issuer.
Further, the regulation provides that the value of allotment to any employee in pursuance of reservation, cannot exceed Rs 2 lakh.
At a Board meeting held here today, SEBI approved a proposal to allow allotment to employees in excess of the extant limit of Rs 2 lakh per employee under employee reservation quota.
“The application for shares of the value in excess of Rs 2 lakh shall be considered as application for additional shares and shall be considered only in the event of under- subscription in the employee reservation portion.
“The unsubscribed shares available in the employee reservation portion shall be allotted on a proportionate basis to the employees who have applied for the additional shares.” pti