SEBI EASES IPO NORMS, PUBLIC FLOAT REQUIREMENTS

The board approves proposal to reclassify REITS and InvITs as equity instruments, while expanding the definition of strategic investor to include QIBS

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TO simplify fundraising through initial public offerings (IPOs), markets regulator Sebi has eased minimum public float norms for large companies in a scale-based manner, depending on post-issue market capitalisation.

Companies with a post-issue market cap above ₹5 lakh crore can now sell a minimum of 2.5% of their paid-up share capital in an IPO, compared to 5% earlier, Sebi chairman Tuhin Kanta Pandey said on Friday after a board meeting.

He said lowering the minimum offer size would make it easier for the market to absorb large issues. For companies with a market cap between ₹1 lakh crore and 5 lakh crore, Sebi has mandated a minimum public offer of 6,250 crore or 2.75% of post-issue market cap, whichever is higher.

There will be no change in norms for IPOs of companies with a market cap below ₹4,000 crore, Pandey added. The Sebi board rejected a proposal to cut the IPO quota for retail investors from 35% to 25%, with Pandey saying retail participation is crucial for the orderly development of equity markets.

For companies with a market cap between 50,000 crore and ₹1 lakh crore, the minimum public shareholding (MPS) of 25% must be achieved within five years, instead of the current three years.