Did SEBI Just Ease IPO Shareholding Rules for Large Companies?
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Synopsis
SEBI's recent regulatory changes are a game-changer for large companies looking to go public. By easing MPS norms, SEBI offers these firms greater flexibility, potentially increasing fundraising opportunities and enhancing market participation.
Key Takeaways
- SEBI has relaxed MPS norms for large companies.
- New timeline: 15% MPS in 5 years, 25% in 10 years.
- Facilitates easier fundraising and reduces immediate stake dilution pressure.
- REITs and InVITs are now classified as equity instruments.
- New website enhances access for foreign portfolio investors.
New Delhi, Sep 12 (NationPress) The Securities and Exchange Board of India (SEBI) has introduced a set of regulatory adjustments following its board meeting, significantly easing the minimum public shareholding (MPS) criteria for large firms intending to conduct initial public offerings (IPOs).
As per SEBI's announcement, firms with a market capitalization ranging from Rs 50,000 crore to Rs 1 lakh crore will now have an extended period to fulfill public shareholding mandates.
These companies will need to reach a 15 percent MPS within five years post-listing and a 25 percent MPS within a decade.
Currently, the stipulation is to achieve the 25 percent threshold within three years.
This initiative is anticipated to facilitate fundraising processes and alleviate the urgency for companies to swiftly dilute substantial stakes, which could adversely influence stock prices.
Industry experts believe this decision will also diminish the necessity for companies to pursue individual exemptions from SEBI.
In another notable decision, SEBI has classified real estate investment trusts (REITs) and Infrastructure Investment Trusts (InVITs) as equity instruments.
This alteration will simplify mutual fund investments in these vehicles and is expected to boost retail investor engagement in these asset classes.
SEBI also revised governance norms for stock exchanges and depositories, aimed at enhancing transparency and oversight within market entities.
Moreover, the regulator has eased eligibility requirements for investment advisors and research analysts.
Going forward, individuals with a degree in any field will be eligible to apply, although obtaining the NISM certification remains a prerequisite.
Furthermore, SEBI has simplified the requirements concerning credit reports, net worth, and asset-liability statements.
To facilitate access for international investors, SEBI has launched “India Market Access,” a new website dedicated to foreign portfolio investors (FPIs).
This portal will offer comprehensive regulatory and procedural information for those interested in investing in Indian markets.
Point of View
It is imperative to recognize that SEBI's recent adjustments reflect a strategic move to foster a conducive environment for large companies in India. By easing MPS norms, the regulator not only alleviates pressure on businesses but also enhances investor confidence, positioning India as a favorable market for growth.
NationPress
13/09/2025
Frequently Asked Questions
What are the new MPS requirements for companies?
Companies with a market capitalization between Rs 50,000 crore and Rs 1 lakh crore will now need to achieve 15% MPS within five years and 25% within ten years.
How does this change affect fundraising?
By easing the MPS requirements, companies can fundraise more effectively without the immediate pressure to dilute large stakes, which can negatively impact share prices.
What is the significance of the new 'India Market Access' website?
The 'India Market Access' website is designed to provide foreign portfolio investors with essential regulatory and procedural information, enhancing accessibility for international investors.
Will investment advisors face more relaxed criteria?
Yes, SEBI has made it easier for investment advisors by allowing graduates from any discipline to apply, while still requiring the NISM certification.
What other changes did SEBI implement?
SEBI also classified REITs and InVITs as equity instruments and amended governance norms for stock exchanges and depositories to improve market transparency.
