The Ministry of Corporate Affairs has (“MCA”) vide Notification G.S.R 123(E) dated 19th February 2021 (“Notification”), notified the Companies (Specification of definitions details) Second Amendment Rules, 2021. (“Amendment Rules”). The Amendment Rules amends the Companies (Specification of definitions details) Rules, 2014, (“Principal Rules”) to exclude from the scope of the definition of “listed company” under the Companies Act, 2013 (“Act”) the following types of companies
a) Public companies which have not listed their equity shares on a recognized stock exchange but have listed their –
non-convertible debt securities issued on private placement basis in terms of SEBI (Issue and Listing of Debt Securities) Regulations, 2008; or
non-convertible redeemable preference shares issued on private placement basis in terms of SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013; or
both categories of (i) and (ii) above.
b) Private companies which have listed their non-convertible debt securities on private placement basis on a recognized stock exchange in terms of SEBI (Issue and Listing of Debt Securities) Regulations, 2008;
(c) Public companies whose equity shares are exclusively listed on a stock exchange in a jurisdiction as specified in Section 23(3) of the Act.
The amendment shall come into force with effect from the 1st day of April 2021.
Observations
This amendment seems to have come in light of the proposed permission for the listing of Indian listed companies on overseas stock exchanges. Whilst it is observed that the relaxation in definition of the listed companies provides a relief to various public and private companies whose equity shares are not listed, the real implications of this relaxation in the definition can only be understood when the guidelines for overseas listing are notified by the MCA.