In order to create awareness among investors to not rely on unauthorized or unsolicited information about public issues, Securities and Exchange Board of India (SEBI) issued a circular for public comments on March 19, 2024. Based on comments received from various stakeholders, it has been decided that salient disclosures made in the Draft Red Herring Prospectus (DRHP), Red Herring Prospects (RHP) and Price Band Advertisement for public issues shall also be made available in Audio Visual format (AV) for ease in understanding the features of public issues.
Such AV shall be prepared and placed in the public domain for all main board public issues. The same shall initially be in bilingual format (English and Hindi). The Hindi version shall contain text in Devanagari script.
The circular issued by SEBI on May 24 also stated that AVs shall contain the following disclosure to investors: “Investors are advised not to rely on any other document, content or information provided in respect to the public issue on the internet/online websites/social media platforms/micro-blogging platforms by finfluencers. Investors are advised to rely only on the information contained in the Offer document and Price Band Advertisement for making investment decision.”
The duration of each bilingual version of the AV shall be approximately 10 minutes and the total duration of the AV shall be equitably distributed to cover material disclosures made under various sections of the DRHP and RHP viz. about the company, risk factors, capital structure, objects of the offer, business of the issuer, promoters, management, summary of financial information, litigations, material developments and terms of the offer etc.
The content of the AV must be factual, non-repetitive, non-promotional and shall not be misleading in any manner, the circular stated, adding that the AV shall also be made available on digital/social media platforms of the Issuer and AIBI.
The provisions of the circular, which details how the AV content should be made, will become applicable on or after July 1, 2024, on a voluntary basis and October 1, 2024, onwards on a mandatory basis.