Shelf Prospectus (Sec 31)

# Section 31 — Shelf Prospectus

## Why Shelf Prospectus?

• Normally, a company must issue a fresh prospectus every time it taps the capital market.
• For frequent issuers (e.g., NBFCs, infrastructure companies), this is repetitive and costly.
• A shelf prospectus stays valid for a fixed period — eliminating the need for a fresh prospectus for each issue.

## Definition

A shelf prospectus is a prospectus filed once with the ROC that allows a company to issue securities for subscription over a period of time without filing a new prospectus for each tranche.

## Filing Requirements

1. First Filing: Filed with ROC at the time of first offer of securities.

2. Validity: Maximum 1 year from the date of the first offer.

3. Subsequent Offers: No new prospectus needed during the validity period.

## Information Memorandum (PAS-2)

Before every subsequent offer under the shelf prospectus:

• The company must file an Information Memorandum (Form PAS-2) with the ROC;
• Filed within 1 month prior to the issue of the second/subsequent offer;
• Must disclose:
• Material facts about new charges created;
• Changes in financial position of the company since the last filing.

## Investor Withdrawal Right

If any applicant wishes to withdraw because of the changes disclosed in the information memorandum:

• The company must refund all subscription amounts within 15 days.

## Combined Document Effect

When the information memorandum is filed alongside the shelf prospectus, the two together are considered the prospectus for each new offer of securities.

## Memory Snapshot