{"id":47450,"date":"2021-03-13T13:48:01","date_gmt":"2021-03-13T08:18:01","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=47450"},"modified":"2022-09-13T16:13:14","modified_gmt":"2022-09-13T10:43:14","slug":"sebi-revisits-mode-of-bidding-in-public-issue-of-debt-securities","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/sebi-revisits-mode-of-bidding-in-public-issue-of-debt-securities\/","title":{"rendered":"SEBI Revisits Mode of Bidding in Public Issue of Debt Securities"},"content":{"rendered":"<p>This article will study how the public issue of debt securities is done and its mode of issue.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">SEBI: An Introduction<\/h2>\n\n\n\n<p>SEBI is the Securities and Exchange Board of India established under <strong>SEBI Act, 1992<\/strong><sup><a href=\"https:\/\/www.sebi.gov.in\/acts\/act15ac.pdf\"><strong>[1]<\/strong><\/a><\/sup>. It is a regulatory body that controls the security <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Market&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A market is a structured environment, either physical or virtual, where buyers and sellers convene to trade goods and services. This trading hub operates based on the principles of supply and(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/market\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>market<\/a> in India. The main objective of SEBI is to protect investors&rsquo; interest and develop the security market in India. It is a body that regulates the issue of securities and its mode of issue.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Public issue<\/h2>\n\n\n\n<p>The public issue is an issue of securities in the market to attract investors for a subscription. The shares are offered for sale to raise capital from the public. The investor who wants to buy shares must have an application to the company, and then debt securities are allotted. The public issue can be further classified into IPO (Initial Public Offer) and FPO (Follow on Public Offer). Section 23 of the Companies Act, 2013 prescribes the provisions for issuing of securities.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Advantages of Public Issue<\/h3>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"497\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2021\/03\/image001-22-1024x497.png\" alt=\"Advantages of Public Issue\" class=\"wp-image-47463\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2021\/03\/image001-22-1024x497.png 1024w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2021\/03\/image001-22-300x146.png 300w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2021\/03\/image001-22-768x373.png 768w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2021\/03\/image001-22.png 1148w\" sizes=\"(max-width: 1024px) 100vw, 1024px\"\/><\/figure><\/div>\n\n\n\n<ul><li>Repayment of capital<\/li><li>Rate of interest<\/li><li>Transfer of Securities<\/li><li>Liquidity<\/li><li>Enhancing value<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Debt Securities<\/h2>\n\n\n\n<p>A debt security is a debt instrument to buy or sell in the market before its maturity. The structure represents a debt owed by the issuer and an investor who is a lender.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Features of Debt Securities<\/h3>\n\n\n\n<ul><li>Issue date &amp; Issue price<\/li><li>Coupon rate<\/li><li>Maturity date<\/li><li>Yield to maturity (YTM)<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Why invest in Debt securities?<\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"893\" height=\"278\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2021\/03\/image003-4.png\" alt=\"Why invest in Debt securities?\" class=\"wp-image-47464\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2021\/03\/image003-4.png 893w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2021\/03\/image003-4-300x93.png 300w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2021\/03\/image003-4-768x239.png 768w\" sizes=\"(max-width: 893px) 100vw, 893px\"\/><\/figure><\/div>\n\n\n\n<ul><li><strong>Return on capital<\/strong><\/li><\/ul>\n\n\n\n<p>The investors purchase it to have a return on their capital. The repayment depends on the one who issues to meet their promises; failure to which will lead consequences.<\/p>\n\n\n\n<ul><li><strong>A regular stream of income from interest payments<\/strong><\/li><\/ul>\n\n\n\n<p>Interest payments associated with such securities also is a regular mode of income throughout the year. These payments are guaranteed and maintain the cash flow.<\/p>\n\n\n\n<ul><li><strong>Means for diversification<\/strong><\/li><\/ul>\n\n\n\n<p>It can also act to diversify their portfolio. Investors can use these financial instruments to manage the risk of their portfolio.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Examples of debt securities<\/h3>\n\n\n\n<p><em><strong>Examples of debt securities include:<\/strong><\/em><\/p>\n\n\n\n<ul><li>Government bond<\/li><li>Corporate bond<\/li><li>Certificate of deposit<\/li><li>Municipal bond<\/li><li>Preferred stock.<\/li><\/ul>\n\n\n\n<p>These can also come in collateralized securities, such as collateralized debt obligations (CDO), collateralized mortgage obligations (CMO), zero-coupon securities.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Public issue of debt securities<\/h2>\n\n\n\n<p>There are several modes through which bidding in the public issue of debt securities is done.<\/p>\n\n\n\n<p><strong>Modes of public issue of securities<\/strong><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"916\" height=\"547\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2021\/03\/image005.png\" alt=\"Public issue of debt securities\" class=\"wp-image-47465\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2021\/03\/image005.png 916w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2021\/03\/image005-300x179.png 300w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2021\/03\/image005-768x459.png 768w\" sizes=\"(max-width: 916px) 100vw, 916px\"\/><\/figure><\/div>\n\n\n\n<ul><li>Self &ndash; certified Syndicate Bank<\/li><li>Intermediaries ( SM, RSBs, RTAs, DPs)<\/li><li>Stock Exchange (App\/ Web interface) (Through UPI mechanism)<\/li><li>Self &ndash; certified Syndicate Bank\/ Intermediaries (Through UPI mechanism).<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Bidding in Public Issue of Debt Securities: Through the UPI mechanism<\/h2>\n\n\n\n<p>UPI (Unified Payment Interface) is a mode of payment through which instant payment is made. It is developed by NPCI (National Payments Corporation of India).<\/p>\n\n\n\n<p>A circular on 23 November 2020 was issued by SEBI that introduced the UPI (Unified Payments Interface) mechanism as an additional mode for making online applications for public issues of various securities. It mandates adding the UPI mechanism as an optional application feature for the public issues of debt securities opens after 1 January 2021.<\/p>\n\n\n\n<p><strong>Salient features:<\/strong><\/p>\n\n\n\n<ul><li>An investor can make an application upto INR 2 lakhs through the UPI mechanism, which can be:<ul><li>Offered through web\/app interface of stock exchanges, and<\/li><li>Through syndicate members, Registrar, transfer agent, depository participants and registered stockbrokers.<\/li><\/ul><\/li><\/ul>\n\n\n\n<p>An investor can also apply through the <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;ASBA&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Applications Supported by Blocked Amount (ASBA) is a system introduced by the Securities and Exchange Board of India (SEBI) to enhance the efficiency and transparency of the application process(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/asba\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>ASBA<\/a> (Applications Supported by Blocked Amount) mode or SCBS (Self- Certified Syndicate Banks or Syndicate ASBA.<\/p>\n\n\n\n<ul><li>This new mode of application will do the work efficiently and reduce the time taken for the whole application process to make sure completion of the listing of securities.<\/li><\/ul>\n\n\n\n<p><strong><em>The circular has increased the responsibilities of the depository participants in the UPI process, inter alia:<\/em><\/strong><\/p>\n\n\n\n<ul><li>Stock exchanges are responsible for:<ul><li>Accurate, timely and to secure transfer of the application file electronically to the Registrar along with all the information on the exchange&rsquo;s website; and<\/li><li>Addressing grievances of investors electronically through app or web interface or through its trading members.<\/li><\/ul><\/li><li>Intermediaries are responsible for:<ul><li>Addressing grievances of investors arising because of the applications uploaded by them; and<\/li><li>Rejection of applications, in case of mismatch between date, entered on the stock exchange and obtained by the Registrar.<\/li><\/ul><\/li><li>Collecting bank is responsible for:<ul><li>Addressing grievances of investors arising from non-confirmation of funds, after the successful payment to the Registrar; and<\/li><li>Any delay in sending forms to the Registrar.<\/li><\/ul><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Steps to bid through UPI mechanism<\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"745\" height=\"546\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2021\/03\/image007.png\" alt=\"Steps to bid through UPI mechanism\" class=\"wp-image-47466\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2021\/03\/image007.png 745w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2021\/03\/image007-300x220.png 300w\" sizes=\"(max-width: 745px) 100vw, 745px\"\/><\/figure><\/div>\n\n\n\n<p><strong>The steps are:<\/strong><\/p>\n\n\n\n<ul><li>Create a UPI ID.<\/li><li>Apply along with UPI ID to either of one:<ul><li>SCSB\/Intermediary<\/li><li>Stock Exchange app\/ web interface.<\/li><\/ul><\/li><li>Stock Exchange Bidding platform:<ul><li>Once the bid is uploaded on the SE platform, the same is communicated to the Investor via SMS.<\/li><\/ul><\/li><li>Validation of PAN and Demat account by SE along with the depository.<\/li><li>Real time validation of PAN and Demat account details by the depository.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>Public issue of debt securities through the UPI mechanism is a step towards digitalization. The online and offline process is quite the same. The UPI mechanism brings ease of making an application for public issue of debt securities.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/enterslice.com\/learning\/sebi-icdr-amendment-regulations-2021\/\"> All about SEBI (ICDR) (<a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Amendment&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;An &amp;quot;amendment&amp;quot; refers to the formal change or correction of a legal document, often involving additions, variations, or deletions to address irregularities or clarify points in an agreement.(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/amendment\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>Amendment<\/a>), Regulations, 2021 <\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This article will study how the public issue of debt securities is done and its mode of issue. SEBI: An Introduction SEBI is the Securities and Exchange Board of India established under SEBI Act, 1992[1]. It is a regulatory body that controls the security market in India. The main objective of SEBI is to protect [&hellip;]<\/p>\n","protected":false},"author":55,"featured_media":47462,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2828],"tags":[3797],"acf":{"service_id":"227"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>SEBI Revisits Mode of Bidding in Public Issue of Debt Securities-Enterslice<\/title>\n<meta name=\"description\" content=\"Public issue of debt securities through the UPI mechanism is a step towards digitalization. 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This process makes ease of the application process.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/sebi-revisits-mode-of-bidding-in-public-issue-of-debt-securities\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2021-03-13T08:18:01+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-09-13T10:43:14+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2021\/03\/SEBI-revisits-mode-of-bidding-in-public-issue-of-debt-securities.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"670\" \/>\n\t<meta property=\"og:image:height\" content=\"377\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Navdisha Sehgal","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2021\/03\/Navdisha.jpeg","authorDescription":"Completed BA LLB from JEMTEC, School of Law, Greater Noida (Affiliated to GGSIP University, New Delhi). I have an experience of about 2 years in various fields of corporate laws, but I have a keen interest in researching on legal issues and to gain knowledge. I always strive to bring the best to work on what I do.","postViews":447,"readingTime":3,"nextPost":{"id":47481,"slug":"rbi-revises-lfar-norms"},"prevPost":{"id":47436,"slug":"svldrs-sabka-vishwas-legacy-dispute-resolution-scheme"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2021\/03\/SEBI-revisits-mode-of-bidding-in-public-issue-of-debt-securities.jpg","postTerms":"SEBI","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/47450"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/55"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=47450"}],"version-history":[{"count":0,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/47450\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/47462"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=47450"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=47450"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=47450"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}