SEBI Board Approves Relaxing Minimum Public Offer Norms
The logo of Securities and Exchange Board of India (SEBI) is pictured on the door handle of a corference room at the market regulator hearquarters in Mumbai, India. (Photo: BloombergQuint)

SEBI Board Approves Relaxing Minimum Public Offer Norms

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The Securities and Exchange Board of India on Wednesday approved a slew of proposals, including relaxing minimum public offer requirements and amending norms for portfolio managers.

Under the current rules, companies seeking to do an initial public offer with post issue market capital of at least Rs 4,000 crore or more, are required to offer to public at least 10% of the post issue market capital. They also have to achieve a minimum public shareholding of 25% within three years of listing.

The board seeks to relax that by permitting large companies to do smaller IPOs.

  • The relaxation will apply to issuers with post issue market capital exceeding Rs.1,00,000 crore.
  • The minimum public offer size to be reduced to Rs.10,000 crore + 5% of incremental amount beyond Rs.1,00,000 crore.
  • Such companies have to achieve at least 10% public shareholding in 2 years and at least 25% public shareholding within 5 years from date of listing.

Such a relaxation could help large potential issuers such as Life Insurance Corporation that is expected to do an IPO in the next fiscal.

Also read: Road To LIC IPO Paved With Special Dispensations

Besides, the board of the market regulator also cleared repealing of SEBI (Underwriters) Regulations, 1993 and amendments to the SEBI (Merchant Bankers) Regulations, 1992 and the SEBI (Stock Brokers) Regulations, 1992.

Continuing efforts to further the ease of doing business in the country, the regulator’s board also approved the merger of SEBI (Regulatory Fee on Stock Exchanges) Regulations, 2006 with Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, according to a media statement.

The SEBI board meeting, held in Delhi today, was addressed by Finance Minister Nirmala Sitharaman.

After the presentation of the Budget every year, it is customary for the finance minister to address the boards of SEBI and Reserve Bank of India.

Minister of State for Finance Anurag Singh Thakur, SEBI Chairman Ajay Tyagi, Finance Secretary Ajay Bhushan Pandey, Economic Affairs Secretary Tarun Bajaj and members of the board were present.

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