The Securities and Exchange Board of India (Sebi) is planning to make it easier for the country’s biggest companies to list on stock exchanges by easing minimum public offer (MPO) norms and extending deadlines for meeting the minimum public shareholding (MPS) requirement. The proposals have been submitted to the government for amendments under the Securities Contracts (Regulations) Rules
Current Rules
At present, companies with a post-issue market value above ₹1 lakh crore are required to sell at least 10% equity at the time of listing.
Proposed Three-Tier System
Sebi has recommended replacing this single threshold with a three-tier structure:
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₹50,000 crore–₹1 lakh crore: Minimum public float of 8%, with a floor of ₹1,000 crore.
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₹1 lakh crore–₹5 lakh crore: Minimum dilution of 2.75%, or at least ₹6,250 crore.
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Above ₹5 lakh crore: Minimum offer of 2.5%, or ₹15,000 crore, whichever is higher.
Extended Timeline for MPS
Sebi has also proposed more flexibility in achieving the 25% minimum public shareholding requirement:
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Firms in the ₹50,000–₹1,00,000 crore range would get five years instead of the current three.
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Companies valued above ₹1 lakh crore would have tiered deadlines:
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Up to 10 years if listing with less than 15% public shareholding.
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Five years if listing with more than 15%.
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Why It Matters
The move is aimed at encouraging India’s largest firms, particularly tech giants and new-age companies, to consider domestic listings instead of overseas markets. By lowering the upfront dilution burden and giving more time for compliance, Sebi hopes to make the Indian capital market more attractive for mega-IPOs.