Brief Overview:
SEBI has clarified that sale of unlisted shares of a company to non-QIB does not necessarily constitute a deemed public issue, provided that the offer is not made to more than 200 persons in aggregate in a financial year.
Technical Details:
1) IDBI Bank Limited proposed to sell unlisted equity shares held by it through secondary sale to identified investors including existing promoters / QIBs and non-QIBs, by way of bilateral / private / negotiated transactions, without any public advertisement.
2) SEBI clarified that, as long as the threshold for offering to not more than 200 persons in a financial year is met, the secondary sale of the unlisted shares of a company (whether public company or private company) by the holder is not treated as a deemed public offer even if it is offered to non-QIB, provided that the sale is conducted on a bilateral basis without any public advertisement.
3) In fact, sale to QIBs are not considered for the above limit of 200 persons, as per the exclusions as set out in the Companies Act, 2013.
4) The above was clarified by the Securities and Exchange Board of India (“SEBI”) in its informal guidance issued to IDBI Bank Limited dated 31st July 2026.
Takeaways:
Sale or transfer of unlisted shares of a company does not necessarily constitute a deemed public issuance if the same is not offered to more than 200 persons in a financial year and is conducted privately on a bilateral basis without any public advertisements.
For further details, please see:
SEBI Informal Guidance Letter dated 31 July 2026 to IDBI Bank Limited
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