The Securities and Exchange Board of India has proposed to give big IPO- bound companies some respite in following the 25% minimum public shareholding norm.
Even the firms that have previously missed the deadline to follow this rule may receive the benefits. However, past violations will not be condoned and penal provisions will remain applicable.
While there is no change for the small and mid-sized companies having a market cap of up to Rs 50,000 crore, large firms valued above Rs 1 lakh crore will be allowed to launch smaller IPOs than currently mandated, and will be given longer time to reach the 25% public shareholding mark, as per the proposal.
If public shareholding at the time of listing is less than 15%, the company will have five years to reach that level and 10 years to achieve 25%. If public shareholding is already above 15%, then the 25% target must be met within five years.
SEBI has also dropped an earlier proposal to reduce the retail quota in IPOs. The regulator had suggested cutting the allocation for retail investors in large IPOs (above Rs 5,000 crore) from 35% to 25%. Following feedback, it has decided to retain the current 35% quota.
The proposals have been put out for public consultation until Sept. 8, 2025.
(This is a developing story)
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