# Devolvement

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This article is about a specialist concept in banking. For the more general concept for which this name is often a synonym, see [devolution (disambiguation)](/source/Devolution_(disambiguation)).

In the [investment banking](/source/Investment_banking) sector, particularly in [India](/source/India), **devolvement** is a process whereby if an investment issue is undersubscribed, an [underwriter](/source/Underwriter#Securities_underwriting) is required to subscribe to the remaining shares. The outstanding unsubscribed amount *devolves* onto the underwriter.[1] This is also known as **hard underwriting**.[2] The [Securities and Exchange Board of India](/source/Securities_and_Exchange_Board_of_India) publishes guidelines and a recommended method of computation relating to the extent of the devolvement onto a particular underwriter in the case where there are multiple underwriters, or sub-underwriters.[1]

## Regulatory framework in India

In India, devolvement arises within the broader underwriting framework regulated by the [Securities and Exchange Board of India](/source/Securities_and_Exchange_Board_of_India) (SEBI). Under the SEBI (Underwriters) Regulations, 1993, an underwriter is a person who undertakes to subscribe to securities of a body corporate when the existing shareholders or the public do not subscribe to the securities offered to them.[3]

SEBI’s investor guidance on the primary market also identifies underwriters as registered intermediaries involved in public issues and notes that offer documents disclose details of underwriting arrangements.[4]

In practice, devolvement occurs when the level of subscription falls below the amount committed under the underwriting arrangement, requiring the underwriter to subscribe to the unsubscribed portion of the issue.

## Notes

1. Subramanyam 2008, p. 9–4.

1. CompetitionCommission 1999, p. 58.

1. ["SEBI (Underwriters) Regulations, 1993"](https://www.indiacode.nic.in/ViewFileUploaded?file=underwriters.pdf&path=AC_CEN_2_11_00014_199215_1517807319932%2Fregulationindividualfile%2F). *India Code*. Retrieved 19 April 2026.

1. ["Introduction: How Primary Market Works"](https://investor.sebi.gov.in/pdf/reference-material/primarymarkets.pdf). *Securities and Exchange Board of India*. Retrieved 19 April 2026.

## References

- Subramanyam, Pratap G (2008). ["Underwriting"](https://archive.org/details/schoolsintransit0000tyek). *Investment Banking: Concepts, Analyses, and Cases*. Tata McGraw-Hill Education. ISBN 978-0-07-065690-1.
- ["3. The share-issuing process"](http://www.competition-commission.org.uk./rep_pub/reports/1999/fulltext/424c3.pdf), "Underwriting services for share offers: A report on the Supply in the UK of underwriting services for share offers", [Competition Commission](/source/Competition_Commission_(United_Kingdom)), 1999, [archived](https://web.archive.org/web/20030731063030/http://www.competition-commission.org.uk./rep_pub/reports/1999/fulltext/424c3.pdf) 2003-07-31 at the Wayback Machine

## Further reading

- ["Frequently Asked Questions on Primary Market Issuances"](http://investor.sebi.gov.in./faq/pubissuefaq.pdf). [Securities and Exchange Board of India](/source/Securities_and_Exchange_Board_of_India)

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Adapted from the Wikipedia article [Devolvement](https://en.wikipedia.org/wiki/Devolvement) by Wikipedia contributors ([contributor history](https://en.wikipedia.org/wiki/Devolvement?action=history)). Available under [Creative Commons Attribution-ShareAlike 4.0 International](https://creativecommons.org/licenses/by-sa/4.0/). Changes may have been made.