Electronic Book Provider
Also written EBP · Electronic Book Provider (EBP) · Electronic Book Provider (EBP) platform
The stock exchange platform on which privately placed debt securities above SEBI's thresholds must be bid for electronically, with published issue details and system-computed cut-offs.
In plain language
Private placement is how Indian companies prefer to raise debt — it is cheaper and faster than a public issue. But a placement negotiated by phone between an arranger and a few favoured investors is opaque.
SEBI's answer is the Electronic Book Provider platform, run by the stock exchanges. Above certain sizes, and for certain issuers, the bidding must happen on screen: every registered participant sees the same issue information, bids are ranked by the system, and the result is disseminated to the market.
How it works
When EBP bidding is compulsory (section 3.17.2):
- a single private placement of Rs 50 crore or more, inclusive of green shoe;
- a shelf issue whose tranches cumulatively reach Rs 50 crore or more in a financial year;
- a subsequent issue where the issuer's previous issues in the financial year aggregate to Rs 50 crore or more;
- any private placement of debt by an issuer in existence for less than 3 years;
- non-equity regulatory capital instruments of a bank or NBFC.
How it runs:
| Step | Rule |
|---|---|
| Registration | Issuer, arrangers, QIBs and custodians register with the exchange; participants enrol before bidding |
| Issue documents | Uploaded at least 2 working days before opening (5 working days for a first-time EBP issuer), with green shoe, bid dates, open or closed bidding, uniform or multiple price/yield allotment, settlement details |
| Announcement | At least 1 working day before bidding starts |
| Bid cap through arrangers | Rs 100 crore or 5% of base issue size, whichever is lower; FPIs bid through custodians |
| Cut-off | Calculated by the system |
| Ranking | Price-time priority where the issuer fixed the coupon; yield-time priority where the coupon is discovered in bidding |
| Fairness | No preferential access to any bidder |
The thresholds and timelines come from the SEBI circulars the workbook cites, which SEBI revises from time to time.
A worked example
Illustrative figures. Three private placements of debt in the same financial year:
| Issuer | Details | EBP compulsory? |
|---|---|---|
| A: a 15-year-old manufacturer | Single issue of Rs 400 crore | Yes — Rs 50 crore or more |
| B: a 2-year-old fintech lender | Single issue of Rs 30 crore | Yes — in existence less than 3 years, whatever the size |
| C: a 10-year-old housing finance company | Shelf tranches of Rs 20 crore, Rs 20 crore and Rs 15 crore | Yes once cumulative issues reach Rs 50 crore — the third tranche takes the total to Rs 55 crore |
Issuer A's bid cap. Base issue Rs 400 crore:
5% of base issue = Rs 20 crore
Cap through arrangers = lower of Rs 100 crore and Rs 20 crore = Rs 20 crore per participant
Issuer A must upload its term sheet and placement memorandum at least 2 working days before opening, and announce the bidding at least a working day ahead. If the coupon is to be discovered, the system ranks bids by yield-time priority and notifies successful bidders of the amount payable.
Why NISM asks about it
Chapter 3 (Primary Markets), section 3.17.2, sets out the EBP framework within the discussion of private placements. Questions test the Rs 50 crore threshold, the less-than-3-years rule, the 2 / 5 / 1 working-day timelines and the per-participant bid cap.
Common exam traps
- The Rs 50 crore threshold includes the green shoe option and can be reached cumulatively through shelf tranches or repeat issues in a financial year.
- A young issuer (under 3 years) must use EBP regardless of size.
- The platform is provided by the stock exchanges, not by SEBI or the RBI.
- 5 working days for a first-time EBP issuer; 2 otherwise; bidding announced at least 1 working day before.
- Price-time priority when the coupon is fixed, yield-time priority when the coupon is discovered — easy to reverse.
- The bid cap is the lower of Rs 100 crore and 5 per cent of the base issue, not the higher.
Check yourself
1.In a book built IPO, when must the price band be announced, and what is the SEBI-prescribed range for the minimum application value?
- a)At least 5 working days before opening; ₹5,000 to ₹10,000
- b)On the opening day; ₹15,000 to ₹20,000
- c)At least 2 working days before the issue opens; ₹10,000 to ₹15,000
- d)At least 2 working days before the issue opens; up to ₹2 lakh
Show the answer
Answer: (c) At least 2 working days before the issue opens; ₹10,000 to ₹15,000
"The price band is announced at least 2 working days before the issue opens. This enables the investors to evaluate the issue and decide the price that they are willing to bid for."
"In a book-built offer, investors must place bids for the minimum bid lot specified by the issuer so that the minimum application value adheres to the SEBI prescribed range of ₹10,000 to ₹15,000."
- Option D is the trap. ₹2 lakh is the ceiling that defines a retail individual investor, not the minimum application.
- Options A and B use figures from neither rule. (The 5 working days figure belongs to first-time issuers on the debt EBP platform.)
Where this is taught
Free preparation for NISM Series XIIRelated terms
- Private placementAn issue of securities to a select group of identified investors — institutions, banks, mutual funds — rather than to the public, with fewer formalities and no advertising.
- Coupon rateThe rate of interest a bond pays, applied to its face value and never to its market price — which is why the coupon tells you the cash flow but not the return.
- Green Shoe OptionAn option in a public issue to allot up to 15 per cent extra shares, parking the money to buy shares in the market for 30 days after listing if the price falls below the issue price.
- Qualified Institutions PlacementA fast route by which an already-listed company places eligible securities privately with Qualified Institutional Buyers, without the prospectus and timetable of a public issue.
- Request for Quote (RFQ) platformThe exchange platform, launched in early 2020, on which participants seek and respond to quotes to execute and settle trades in debt securities, with an audit trail that brings pre-trade transparency to an OTC market.
- Online Bond Platform ProviderA person operating an online bond platform — an electronic system, other than a stock exchange or EBP, where listed or to-be-listed debt securities are offered and transacted, chiefly for non-institutional investors.
- SecuritisationThe process of turning a lender's illiquid loans into a liquid pool of tradable bonds, by transferring the loans to a Special Purpose Vehicle that funds itself by issuing securitised debt against them.
- Certificate of DepositA negotiable, unsecured money market instrument issued by a bank against funds deposited with it, sold at a discount and repaid at face value within one year.
- Commercial PaperA short-term, unsecured, discounted money market instrument through which eligible companies raise funds for 7 days to one year, issued in Rs 5 lakh multiples.