In a meeting held on September 12, the board of SEBI decided to give relief to big companies in the case of IPOs. Now big companies will be able to sell minimum 2.5 shares of their paid-up capital in their IPO. Currently, after the listing, companies with Rs 5 lakh crore have to sell at least 5 % of their paid-up capital in IPOs. With this new rule, big companies will also be able to present small size IPOs in the market.
5 years will get 5 years instead of 3 years to follow MPS rule
Companies whose market capitalization will be Rs 50,000 crore to Rs 1 lakh crore (after listing), has a minimum public shareholding of 25 per cent (MPS) 5 years will be available for following the rule. Right now such companies used to get only 3 years to follow this rule. Companies whose market is more than Rs 1 lakh crore after the capacity listing will get 10 years to follow the minimum public shareholding rule.
Four new categories of companies to follow IPO rules
SEBI chairman Tuhin Kant Pandey spoke about the important decisions that took place today after the board meeting on 12 September. He said, “We are presenting four additional categories in addition to the current 4,000 crore level category. The first is 4,000 crore to 50,000 crore. Second, the second, 50,000 crore to 1 lakh crore rupees. Third, third, is Rs 1 lakh crore to Rs 5 lakh crore. The fourth is more than Rs 5 lakh crore.”
Company of up to 1 lakh crores will be able to present small IPOs
He said that after the listing, the market capitation will not be more than Rs 5,500 crore but not more than Rs 1 lakh crore, the minimum public offer is being revised. After the issue, it is being reduced to Rs 1,000 crore from the current rule of market capitalization of 10 per cent. There will also be a market capitalization of 8 % after the plus issue.
Separate rules for a company with 5 lakh crores
The SEBI chairman said, “The company whose market will be Rs 1 lakh crore and above after the issue of Rs. 6,250 crore after a plus issue can be at least 2.75 per cent of the market capitalization after a plus issue. The company’s market will have Rs 5 lakh crore after the issue of Rs 5 lakh crore after the issue of Rs 5 lakh crore. The market will be 1 percent of captivity.
Single window access for low-risk foreign investors
In the meeting held on 12 September, the board of SEBI decided to make the rules of entry in the Indian market easier. Low-risk foreign investors will be able to participate in the Indian Securities Market through single window access. The aim of this step is to make the compliance easier. This will make India the identity of India as an attractive destination of investment in the world.
Reits and Invits status of equity instruments
SEBI board took some more major decisions at the meeting. This includes a proposal to give equity instruments status to Real Estate Investment Trusts and Infrastructure Invitment Trusts (Invits). Apart from this, SEBI will change the definition of strategic investor under the rules of Reit and Invit and bring QIB under it. Regulator also decided to make changes in the governance framework of stock exchanges. For this, the appointment of two executive directors will be made mandatory.