Romit Dey, Partner at AP & Partners, analyses SEBI’s proposed amendment to exempt investors from the one-year holding period for equity shares acquired through the conversion of compulsorily convertible securities allotted under a merger or amalgamation scheme, and its potential to simplify exit timelines for foreign investors.
This change is particularly relevant for reverse flip structures involving cross-border mergers, where investors in an overseas company are issued equivalent convertible securities in an Indian entity.
Under the proposed framework, such investors may now be able to convert these securities and exit via IPO shortly after the merger, bypassing the existing one-year lock-in period.
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