Lock-In of Pre-Issue Share Capital of an Unlisted Company
The entire pre-issue share capital, other than locked-in as promoters contribution, would be locked-in for one year from the date of commencement of commercial production or the date of allotment in the public issue, whichever is later. But shares held by promoters lent to the stabilizing agent (SA) are exempt from the lock a in requirement for the period starting from the date of lending to the date when they are returned to the same promoters. The mechanism of such lending is elaborated in a subsequent section (i.e. green shoe option). These stipulations are not applicable to pre-issue share capital held by (i) the SEBI registered venture capital funds and foreign venture capital investors and subject to lock-in provisions of the SEBI Venture Capital Fund Regulations and the SEBI Foreign Venture Capital Investors Regulations respectively and (ii) for a period of at least one year at the time of filing the draft offer document with the SEBI and being offered to public through offer for sale.