SEBI approves easing of IPO norms for large companies
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The Securities and Exchange Board of India today said that its board has decided to recommend changes in the Securities Contracts Regulations 1957 to make it easier for large companies with market capitalisation of more than Rs 1 lakh crore to list on the Indian stock exchange.
The board has decided to lower the minimum public offer through an initial public offering by a company with a post-issue market capitalisation of more than Rs 1 lakh crore to Rs 10,000 crore plus 5 per cent of the incremental amount beyond Rs 1 lakh crore. The capital market regulator held its final board meeting of the current financial year earlier today.
These issuers shall be required to achieve at least 10 per cent public shareholding in two years and at least 25 per cent within five years from the date of listing, Sebi said in a statement.
Presently, company’s approaching the IPO market are required to offer at least 10 per cent of their post-offer equity in public offers and increase the minimum free float to 25 per cent within three years.
Market participants believe that the proposed changes by the capital market regulator could pave the way for the government to fasttrack the initial public offering for Life Insurance Corp of India by selling around 5 per cent stake in the IPO.
Media reports had earlier stated that the government may look at selling around 10-15 per cent stake of LIC through the IPO. “I don’t think they will like to open LIC to that much scrutiny initially; so it is likely to be a small offer much like Aramco,” said a chief investment officer with a city-based life insurance firm.
The board has decided to lower the minimum public offer through an initial public offering by a company with a post-issue market capitalisation of more than Rs 1 lakh crore to Rs 10,000 crore plus 5 per cent of the incremental amount beyond Rs 1 lakh crore. The capital market regulator held its final board meeting of the current financial year earlier today.
These issuers shall be required to achieve at least 10 per cent public shareholding in two years and at least 25 per cent within five years from the date of listing, Sebi said in a statement.
Presently, company’s approaching the IPO market are required to offer at least 10 per cent of their post-offer equity in public offers and increase the minimum free float to 25 per cent within three years.
Market participants believe that the proposed changes by the capital market regulator could pave the way for the government to fasttrack the initial public offering for Life Insurance Corp of India by selling around 5 per cent stake in the IPO.
Media reports had earlier stated that the government may look at selling around 10-15 per cent stake of LIC through the IPO. “I don’t think they will like to open LIC to that much scrutiny initially; so it is likely to be a small offer much like Aramco,” said a chief investment officer with a city-based life insurance firm.
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