Document background
The Standby Equity Distribution Agreement (SEDA) serves as a strategic financing tool in the Indian market, particularly valuable for companies requiring flexible access to growth capital. It establishes a commitment from an investor to purchase newly issued shares over a specified period, typically ranging from 12 to 36 months. The agreement is commonly used by both listed and unlisted companies seeking to maintain consistent access to funding while retaining control over the timing and size of capital raises. Under Indian law, these agreements must comply with various regulatory frameworks, including the Companies Act, 2013, SEBI regulations, and where applicable, stock exchange requirements. The document includes crucial elements such as pricing mechanisms, draw-down procedures, regulatory compliance requirements, and investor protections, making it a comprehensive framework for ongoing equity financing relationships.
