Mumbai: The board of the markets regulator Sebi is set to explore a series of regulatory reforms in its meeting today. These reforms may include easing the minimum IPO requirements for large corporations and extending the timeline for compliance with minimum public shareholding norms, according to sources. Key agenda items also encompass simplifying compliance for foreign portfolio investors (FPIs), relaxing regulations for accredited investors within specific alternative investment funds (AIFs), broadening the activities of rating agencies, and granting equity status to REITs and InvITs. Many of these proposals have already been put forward for public consultation, signaling a significant move towards enhancing the regulatory framework.
This meeting will be the third under the leadership of Tuhin Kanta Pandey, who took office on March 1. The board may endorse a proposal aimed at motivating large issuers to seek listings in India. For companies valued between Rs 50,000 crore and Rs 1 lakh crore, the new minimum public offer (MPO) would be Rs 1,000 crore, requiring at least 8 percent of post-issue capital, with minimum public shareholding (MPS) of 25 percent to be achieved within five years instead of the current three.
For companies with a market capitalization from Rs 1 lakh crore to Rs 5 lakh crore, the MPO would be Rs 6,250 crore, requiring at least 2.75 percent of post-issue capital, with MPS deadlines extended to ten years depending on shareholding levels. Companies exceeding Rs 5 lakh crore in market capitalization would face a proposed MPO of Rs 15,000 crore and a minimum dilution of 2.5 percent. This structure allows companies to initiate listings with smaller IPOs and gradually increase public shareholding over an extended timeline, alleviating the immediate pressure of significant equity dilution.