SEBI, by way of a Notification dated October 26, 2021, notified amendments to Regulation 6 of the ICDR Regulations, as a result of which SEBI has rationalised the framework governing the issue of superior voting rights (‘SR Shares’).

In 2019, SEBI created a SR Shares framework, which was designed exclusively for issuer companies that use technology extensively. The framework permits promoters or founders who occupy an executive role at the firm and want to list on the mainboard, to be issued SR Shares.

By amending the explanation to Regulation 6(3)(ii) of the ICDR Regulations, SEBI raised the net worth of the SR Shares shareholder, as determined by a registered valuer, to Rs 10,000,000,000 (approx. US$ 135 million), as opposed to the current limit of Rs 5000,000,000 (approx. US$ 67.5 million). Further, while determining the individual net worth of the SR Shares shareholder, his/her investment or shareholding in other listed companies will be considered, but not that of his/her shareholding in the issuer company.

In an attempt to make the process seamless, the minimum time between the issuing of SR Shares and the submission of the red herring prospectus has been decreased from six months to three months.