The Securities and Exchange Board of India (Sebi) on Wednesday relaxed norms for the listing of large initial public offerings (IPOs).
According to the present rules of the Securities Contracts (Regulation) Rules, 1957 (SCRR), issuers with post- issue capital of more than Rs 4,000 crore should offload at least 10 per cent in the IPO. Moreover, they are required to achieve a minimum public shareholding (MPS) of at least 25 per cent within three years from the date of listing.
At its board meeting on Wednesday, the Sebi board decided to recommend changes in the SCRR for issuers with post-issue capital of over Rs 1,00,000 crore. For such issues, Sebi said the requirement of MPS will be reduced from the current 10 per cent to Rs 10,000 crore plus five per cent of the incremental amount beyond Rs 1,00,000 crore. Thus, for example, if a company’s post-issue capital is Rs 1,25,000 crore, the minimum offer will come to Rs 1,250 crore plus Rs 10,000 crore aggregating to Rs 11,250 crore.
Sebi added these issuers shall be required to achieve at least 10 per cent public shareholding in two years and at least 25 per cent within five years from the date of listing.
Sebi’s relaxation comes at a time the mammoth IPO of Life Insurance Corporation (LIC) is set to hit the capital markets next fiscal.
At its meeting, the board also approved the repealing of Sebi (Underwriters) Regulations, 1993, and amendment to Sebi (Merchant Bankers) Regulations, 1993 and Sebi (Stock Brokers) Regulations, 1992.