Sebi eases IPO rules, extends public shareholding timeline for large cos

The move is expected to benefit mega IPOs including that of Reliance Jio Infocomm and the National Stock Exchange

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Stock market regulator Sebi on Friday decided to relax initial public offering (IPO) rules for very large companies and also extend the timeline by up to 10 years for them to meet minimum public shareholding (MPS) norms.

The move is expected to benefit mega IPOs including that of Reliance Jio Infocomm and the National Stock Exchange (NSE).

The new framework, if implemented, would reduce the immediate dilution burden while still ensuring gradual compliance with public shareholding norms.

Under the new framework, companies with a mcap between Rs 50,000 crore and Rs 1 lakh crore, would be required to float 8 per cent of their equity instead of the current 10 per cent. Such firms would also get a timeline of five years instead of the present three years for achieving minimum public shareholding requirement of 25 per cent.

For companies with a mcap above Rs 1 lakh crore, mandatory offer requirements would be reduced to 2.75 per cent from the current 5 per cent, while those above Rs 5 lakh crore would need to dilute only 2.5 per cent.

Such large companies would also be given up to 10 years to achieve the 25 per cent minimum public shareholding requirement, compared with five years at present.