Section 4 in The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018
(4)In case the promoters have to subscribe to equity shares or convertible securities towards minimum promoters' contribution, the amount of promoters' contribution shall be kept in an escrow account with a scheduled commercial bank, which shall be released to the issuer along with the release of the issue proceeds:Provided that where the promoters' contribution has already been brought in and utilised, the issuer shall give the cash flow statement disclosing the use of such funds in the offer document;Provided further that where the minimum promoters' contribution is more than one hundred crore rupees and the initial public offer is for partly paid shares, the promoters shall bring in at least one hundred crore rupees before the date of opening of the issue and the remaining amount may be brought on a pro-rata basis before the calls are made to the public.Explanation: For the purpose of this regulation:(I)Promoters' contribution shall be computed on the basis of the post-issue expanded capital:(a)assuming full proposed conversion of convertible securities into equity shares;(b)assuming exercise of all vested options, where any employee stock options are outstanding at the time of initial public offer in terms of proviso (a) to sub-regulation (2) of regulation 5.(II)For computation of "weighted average price":(a)"weight" means the number of equity shares arising out of conversion of such specified securities into equity shares at various stages;(b)"price" means the price of equity shares on conversion arrived at after taking into account the predetermined conversion price at various stages.
