SEBI allows large companies to launch IPOs with smaller issue
SEBI: Security Board Exchange of India has taken many important decisions in its board meeting, one of which was that now companies with big valuations will also be able to bring small size IPOs in the market. SEBI has said that if the market cap of companies after listing is more than Rs 5 lakh crore, then they will now be able to sell a minimum of 2.5% of their capital in their IPO, which is currently 5%. Meaning that SEBI has reduced it from 5% to 2.5%. SEBI said that this will make it easier for the market to buy shares in large quantities.
Now companies with big valuations will also be able to bring small size issues in the market
SEBI has made many new changes related to the market
Along with this, SEBI also mentioned that for companies with a market cap between Rs 50,000 crore and Rs 1 lakh crore, MPS of 25% is to be achieved in 5 years instead of the current 3 years. SEBI has also reduced the time limit for large companies to meet the 25% public float requirement from three years to five years. It states that companies whose market capitalization after listing is more than Rs 1 lakh crore will be given up to 10 years to follow it.
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We are introducing four additional limits beyond the current level of Rs 4,000 crore, Sebi Chairman Tuhin Kant Pandey said in a press conference held after the board meeting in Mumbai.
Rs 4,000 crore to Rs 50,000 crore
Rs 50,000 crore to Rs 1 lakh crore
Apart from this, the minimum public offer (IPO) for companies with post-issue market value of Rs 5,500 crore to Rs 1 lakh crore is proposed to be reduced from 10% of the post-issue market cap to Rs 1,000 crore and at least to 8%.
Other decisions of the Sebi board
Real estate and infra trusts - Sebi will now classify Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) as equity instruments.
Change in the definition of strategic investor- SEBI has further broadened the definition of 'strategic investor' for REITs and InvITs, which also includes QIB (Qualified Institutional Buyers).
Reforms in stock exchange- SEBI has made a major change in the management of stock exchanges. Now the appointment of two executive directors will be mandatory.
Easy rules for AIF- SEBI has approved an easy regulatory framework for Alternative Investment Funds (AIFs) with accredited investors.
New framework for anchor investors in IPO- SEBI has changed the rules for share allotment to anchor investors to increase the participation of institutional investors in IPO.
IPO rules eased for large companies - SEBI has simplified IPO rules for very large companies and extended the time limit for achieving minimum public shareholding to 10 years.
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