Wider MPS Runway May Aid Issuers, Open Offers

Sebi Proposal Extends Compliance Window for 25% Public Float

- KHUSHBOO TIWARI

The Securities and Exchange Board of India's (Sebi's) proposal to extend the timeline for meeting the 25 per cent minimum public shareholding (MPS) requirement could benefit both listed companies and open offers.

At present, newly listed companies such as Hyundai Motor India and Bajaj Housing Finance have promoter shareholding above the 75 per cent threshold. Legal experts say these companies could get more flexibility if the market regulator's proposal to provide an extended compliance window is approved.

Currently, the Securities Contract (Regulations) Rules (SCRR) mandate a five-year period to reach 25 per cent public shareholding. Sebi has now proposed extending this to up to 10 years for companies with an after-issue market capitalisation of ₹1 trillion or more.

If a company lists with less than 15 per cent public shareholding, it must reach 15 per cent within five years and 25 per cent within 10 years. If it lists with 15 per cent or more, the 25 per cent threshold must be achieved within five years, Sebi has proposed.