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Key Points

SEBI has introduced significant regulatory relaxations for large companies planning IPOs. The new rules extend the minimum public shareholding compliance period from 3 to 10 years for achieving 25% public holding. The regulator also reclassified REITs and InVITs as equity instruments to boost retail participation. Additionally, SEBI simplified eligibility criteria for investment professionals and launched a new portal for foreign investors.

Key Points: SEBI Eases IPO Shareholding Rules for Large Companies Market Cap

  • Companies with Rs 50,000-1 lakh crore market cap get extended MPS deadlines
  • New rules require 15% public shareholding within 5 years of listing
  • REITs and InVITs now classified as equity instruments for easier investment
  • SEBI simplifies eligibility for investment advisors and research analysts
2 min read

SEBI eases IPO shareholding rules, brings relief for large companies

SEBI relaxes minimum public shareholding norms for large companies, extending deadlines to 10 years for 25% MPS. Also eases rules for REITs, InVITs, and investment advisors.

"This move is expected to make fundraising easier and reduce pressure on companies to immediately dilute large stakes - SEBI Release"

New Delhi, Sep 12

The Securities and Exchange Board of India (SEBI) on Friday announced a series of regulatory changes after its board meeting, including a major relaxation in minimum public shareholding (MPS) norms for large companies planning initial public offerings (IPOs).

According to SEBI’s release, companies with a market capitalisation of Rs 50,000 crore to Rs 1 lakh crore will now get more time to meet the public shareholding requirements.

They will be required to achieve 15 per cent MPS within five years of listing and 25 per cent within 10 years.

At present, companies are required to meet the 25 per cent threshold within three years.

This move is expected to make fundraising easier and reduce pressure on companies to immediately dilute large stakes, which often affects share prices.

Experts said the step will also reduce the need for companies to seek case-by-case exemptions from SEBI.

In another decision, SEBI allowed real estate investment trusts (REITs) and Infrastructure Investment Trusts (InVITs) to be classified as equity instruments.

This change will make it easier for mutual funds to invest in them and is expected to increase retail investor participation in these asset classes.

SEBI also amended governance norms for stock exchanges and depositories, aiming to improve transparency and oversight in market institutions.

Additionally, the regulator has relaxed eligibility criteria for investment advisors and research analysts.

From now on, a graduate in any discipline will be eligible to apply, though clearing the NISM certification remains mandatory.

SEBI has also simplified requirements around credit reports, net worth and asset-liability statements.

To improve access for overseas investors, SEBI launched a new website called “India Market Access” for foreign portfolio investors (FPIs).

The portal will provide comprehensive regulatory and procedural details for those looking to invest in Indian markets.

- IANS

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Reader Comments

P
Priya S
As a small investor, I'm concerned about the extended timelines. While it helps companies, retail investors might have to wait longer for proper liquidity. Hope SEBI monitors implementation closely.
A
Aditya G
The REITs/InVITs classification as equity is brilliant! This will open up so many opportunities for retail investors to participate in real estate and infrastructure projects. Mutual funds will now include them in portfolios 🏗️
M
Michael C
The India Market Access portal is a game-changer for foreign investors. Simplifying regulatory procedures will attract more FPI money into Indian markets. Great step towards making India more investor-friendly!
S
Shreya B
Relaxing eligibility for investment advisors is concerning. While accessibility is good, we need to ensure quality advice reaches common investors. Hope the NISM certification maintains strict standards 🤔
V
Vikram M
These reforms show SEBI is thinking long-term. The 5-10 year timeline for large companies makes sense - it aligns with India's growth story. More companies will now consider listing in India rather than overseas markets 🇮🇳

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