SEBI’s Recent Informal Guidance Impacts OneSource Specialty Pharma’s Fundraising Plans
OneSource Specialty Pharma, a contract development and manufacturing organisation (CDMO), is facing hurdles in its fundraising plans due to a recent informal guidance by the market regulator.
The company was part of a scheme of arrangement with Strides Pharma Science, a listed company, and Steriscience Specialties, an unlisted entity. The scheme involved the demerger of businesses from Strides and Steriscience into OneSource.
Last year, OneSource issued redeemable non-convertible debentures through private placement, which were listed on BSE in May. The scheme was approved by shareholders and creditors in September and is currently awaiting final approval from NCLT.
The Issue at Hand
OneSource sought informal guidance from SEBI regarding its eligibility to conduct a qualified institutional placement (QIP) immediately post-listing of its shares. According to Regulation 172(1)(b) of SEBI’s Issue of Capital and Disclosure Requirements, a company must have its equity shares listed for at least a year before issuing shares through a QIP. However, a transferee company in an approved merger scheme can count the listing history of its transferor company towards this requirement.
Since Strides’ shares have been listed for over a year, OneSource inquired whether it could benefit from the exemption in Regulation 172(1)(b) based on Strides’ listing history, despite Steriscience being unlisted.
SEBI’s Clarification
SEBI confirmed that all transferor companies involved in the scheme must be listed entities for the transferee company to avail the one-year listing exemption. Since Steriscience is unlisted, OneSource does not qualify for the exemption and must wait for one year post-listing before proceeding with a QIP.
Experts’ Perspectives
Binoy Parikh, Executive Director at Katalyst Advisors, emphasized that when a company gets listed through a merger or demerger without an IPO, compliance with listing norms is assumed. Gaurav Pingle, a company secretary, expressed concern over the potential impact of SEBI’s interpretation on the fundraising plans of listed entities in similar corporate restructuring scenarios.
Ultimately, SEBI’s guidance has created a regulatory roadblock for OneSource Specialty Pharma, impacting its QIP plans post-listing. The continuity of listing, a fundamental aspect of the exemption for QIP issuance, has been disrupted by this decision.
