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Key Points

SEBI's Friday board meeting will consider major regulatory changes to boost capital markets. Large companies may get relaxed stake dilution requirements and extended deadlines for minimum public shareholding. The anchor investor pool will expand to include insurance and pension funds with increased allocation limits. The meeting will also simplify FPI compliance and discuss phasing out weekly F&O contracts.

Key Points: SEBI Board Meeting to Relax IPO Norms and Anchor Investor Rules

  • Relaxed stake dilution norms for large companies with Rs 5 lakh crore market cap
  • Extended deadlines up to 10 years for minimum public shareholding compliance
  • Anchor investor pool expansion from 33% to 40% including new fund categories
  • Simplified FPI compliance and eased AIF rules for accredited investors
  • New threshold system for materiality of related party transactions
  • Potential phase-out of weekly F&O contracts in favor of monthly expiries
2 min read

SEBI board meeting to consider relaxed IPO norms, new anchor allocation rules

SEBI considers relaxed stake dilution for large firms, extended MPS deadlines, expanded anchor investor pool including insurance and pension funds in Friday board meeting.

"Companies with post-issue market capitalisations exceeding Rs 5 lakh crore may need to maintain a minimum float of Rs 15,000 crore plus 1 per cent - SEBI Proposal"

New Delhi, Sep 12

Capital markets regulator Securities and Exchange Board of India (SEBI) is set to review key regulatory changes at its board meeting on Friday, including relaxed stake dilution norms for large companies, and amended allocation norms for anchor investors in IPOs.

The regulator is considering stake dilution norms to permit large firms to launch smaller initial public offerings. SEBI also considers extending deadlines to comply with minimum public shareholding requirements.

Companies with post-issue market capitalisations exceeding Rs 5 lakh crore may need to maintain a minimum float of Rs 15,000 crore plus 1 per cent, subject to a minimum of 2.5 per cent public float.

Firms valued between Rs 1 lakh crore and Rs 5 lakh crore could be required to issue at least Rs 6,250 crore plus 2.75 per cent. Depending on their shareholding levels, they could get up to 10 years to meet the minimum public shareholding mandate, according to reports.

The board plans to expand the anchor investor pool for IPOs, increasing reserved allocations from 33 per cent to 40 per cent by adding insurance and pension funds to mutual funds. For IPOs with an issue size of Rs 250-Rs 500 crore, the number of permitted anchor allottees is proposed to increase from 25 to 30.

The meeting is also likely to take up steps to simplify compliance for foreign portfolio investors (FPIs), ease rules for accredited investors in certain alternative investment funds (AIFs), widen the scope of activities for rating agencies, and give equity status to Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs).

Further, multiple reports said the SEBI board is likely to discuss and approve a new threshold-based system for determining the materiality of related party transactions (RPTs). The move aims to align compliance requirements with the turnover of listed entities.

SEBI may release a consultation paper within a month on phasing out weekly futures and options (F&O) contracts.

The regulator is planning a shift to monthly expiries with a defined transition plan and may also look at introducing same-day expiry across stock exchanges.

Meanwhile, earlier this week, SEBI announced that it has amended its rules to allow promoters to retain employee stock options (ESOPs) granted at least one year before filing IPO papers.

- IANS

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Reader Comments

P
Priya S
Including insurance and pension funds as anchor investors is a smart move. Will bring more stability to IPO pricing and protect retail investors from volatility.
R
Rohit P
While these changes seem positive, I hope SEBI doesn't dilute regulations too much. We've seen what happens when oversight becomes too relaxed. Balance is key.
S
Sarah B
The move to phase out weekly F&O contracts and shift to monthly expiries could reduce speculative trading. Good for long-term market health!
V
Vikram M
ESOP retention by promoters before IPO filing is a welcome change. Will help startups and growing companies retain talent while going public. 🇮🇳
M
Michael C
The threshold-based system for related party transactions makes sense. One-size-fits-all compliance was hurting smaller listed companies. Progressive thinking!

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