Post-issue reports
The reports a lead manager files with SEBI after an issue — for a public issue a final report within seven days of the basis of allotment; for a rights issue an initial report in three days and a final one in fifteen.
In plain language
Filing the offer document is the start of a merchant banker's accountability, not the end. After the issue closes, applications have to be processed, shares allotted and credited, blocked money released, refunds made and listing obtained — and SEBI wants a formal account from the lead manager that all of it happened, on time and as disclosed. Those accounts are the post-issue reports.
They come with a signature that matters: the final report is accompanied by a due diligence certificate, so the lead manager is putting its own name to the completeness of the post-issue process just as it did to the offer document.
How it works
Public issue — Regulation 55. The lead manager(s) shall submit a final post-issue report as specified in Part A of Schedule XVII, along with a due diligence certificate, within seven days of the date of finalisation of the basis of allotment, or within seven days of refund of money in case of failure of the issue.
Rights issue. Two reports, not one:
| Report | Format | Deadline |
|---|---|---|
| Initial post-issue report | Part B of Schedule XVII | Within three days of closure of the issue |
| Final post-issue report | Part C of Schedule XVII | Within fifteen days of finalisation of the basis of allotment, or of refund in case of failure |
| Due diligence certificate | Form F of Schedule V | Along with the final post-issue report |
What surrounds the reports. The same post-issue section of Chapter 6 requires the lead manager to:
- release a post-issue advertisement giving subscription, basis of allotment, numbers and values of applications and successful allottees, refund/unblocking and credit dates and the listing application date, within ten days from completion of the various activities, in at least one English national daily, one Hindi national daily and one regional language daily at the place of the registered office — and place the details on the stock exchanges' websites;
- issue the notice for devolvement on underwriters within ten days of closure, where there is devolvement;
- confirm to the bankers to the issue, with copies of listing and trading approvals, that all formalities are complete so they may release money to the issuer (or for refund if the issue failed);
- stay responsible for post-issue activities until applicants have received securities or refunds and listing or trading permission is obtained.
The same idea in other transactions. The manager to an open offer files a report with SEBI within 15 working days from the expiry of the tendering period (Chapter 7), and in a buy-back the merchant banker sends a final report within 15 working days from the date of expiry of the buyback period (Chapter 8).
A worked example
Illustrative dates and sizes. A merchant banker is running two mandates in the same autumn.
A Rs 850 crore IPO.
| Step | Date |
|---|---|
| Issue closes | Wed 10 Sep |
| Basis of allotment finalised | Thu 11 Sep |
| Final post-issue report + due diligence certificate due | by 18 Sep (seven days) |
| Post-issue advertisement | within ten days of completing each activity |
A Rs 300 crore rights issue.
| Step | Date |
|---|---|
| Issue closes | Fri 3 Oct |
| Initial post-issue report (Part B) due | by 6 Oct (three days) |
| Basis of allotment finalised | Wed 8 Oct |
| Final post-issue report (Part C) + Form F due diligence certificate | by 23 Oct (fifteen days) |
The desk that treats both as "a week after allotment" gets the IPO right and files the rights-issue initial report nine days late — and has no initial report at all on its checklist for the IPO, where none is required.
Now suppose the IPO had failed minimum subscription. The seven days would run instead from the date of refund of the money — so the report cannot be filed until the refunds (or ASBA unblocks) are actually complete.
Why NISM asks about it
Chapter 6 (Issue Management – General Obligations of Merchant Bankers and Due Diligence), at 15% of the paper, lists post-issue reports as item 5 of the merchant banker's general obligations; Chapter 5 (Issue Management – Process and Underwriting) repeats the seven-day rule in its post-issue section.
The three day counts — seven (public issue final), three (rights initial) and fifteen (rights final) — are a ready-made "match the deadline" question, and the Form F due diligence certificate is a candidate for a which-form question.
Common exam traps
- A public issue has one post-issue report in the workbook; a rights issue has two.
- Seven days is from finalisation of the basis of allotment, not from issue closure — unless the issue failed, when it runs from the refund.
- The rights-issue initial report runs from closure (three days); the final report runs from the basis of allotment (fifteen days).
- The due diligence certificate goes with the final report. For a rights issue it is Form F of Schedule V.
- Ten days belongs to the post-issue advertisement and the devolvement notice, not to the reports.
- Open offers and buy-backs count in working days — 15 working days — whereas the issue reports are stated in days.
Check yourself
1.What post-issue reports must the lead merchant banker submit in a rights issue?
- a)A single final report within seven days of the basis of allotment
- b)An initial report within seven days of closure and a final report within thirty days
- c)A final report within fifteen days of listing only
- d)An initial post-issue report within three days of closure, and a final post-issue report within fifteen days of finalisation of the basis of allotment (or of refund on failure), with a Form F due diligence certificate
Show the answer
Answer: (d) An initial post-issue report within three days of closure, and a final post-issue report within fifteen days of finalisation of the basis of allotment (or of refund on failure), with a Form F due diligence certificate
Two reports: three days and fifteen days. In a rights issue, the lead merchant banker submits an initial post issue report as specified in Part B of Schedule XVII, within three days of closure of the issue, and a final post issue report as specified in Part C of Schedule XVII, within fifteen days of the date of finalization of basis of allotment or within fifteen days of refund of money in case of failure of issue, along with a due diligence certificate as per the format specified in Form F of Schedule V.
- Single report within seven days — that is the public issue rule under Regulation 55 (Part A of Schedule XVII).
- Seven and thirty days — neither figure applies.
- Fifteen days of listing — the fifteen days run from the basis of allotment (or refund), and there is also an initial report.
Where this is taught
Free preparation for NISM Series IXRelated terms
- Rights issueAn offer of new shares at a set price to existing shareholders in a fixed ratio to what they already hold, so that their proportionate stake is not diluted when the company raises fresh capital.
- Minimum subscriptionThe least an issue must raise to go ahead — at least 90% of the fresh issue offered through the offer document; if it is not received, all application money is refunded within four days of closure.
- Merchant bankerA SEBI-registered body corporate engaged in the business of issue management — arranging the selling, buying or subscribing of securities, or acting as manager, consultant or adviser in relation to an issue.
- DevolvementThe part of an under-subscribed issue that falls on an underwriter to take up — its underwriting commitment less the applications it procured — notified by the lead manager within ten days of closure.
- Due diligence certificateThe formal certificate a lead manager signs and files with SEBI at prescribed stages of an issue, confirming that it has verified the issuer's disclosures and that the offer document is compliant.
- Misleading advertisementAn issue advertisement that states the issuer's performance without the necessary qualifying statements, or portrays past performance inaccurately or as if past gains will be repeated in future.
- Registrar to an issueA SEBI-registered intermediary that, for an issuer, collects applications, keeps records of applications and money, and helps fix the basis of allotment and send out allotments and refunds.
- Document Repository platformAn online platform set up by the stock exchanges on which merchant bankers upload and maintain electronically the documents they relied upon while conducting due diligence in a public issue.