SEBI Extends Deadline For Comments On Minimum Public Offer Requirement To December 24

Markets regulator SEBI on Monday extended till December 24 the deadline for submission of public comments on review of the minimum public offer requirement for large issuers.

In November, SEBI had put up a consultation paper on review of requirement of minimum public offer for large issuers in terms of Securities Contracts (Regulation) Rules.

It proposed to reduce the minimum offer size in an initial share sale, whereby companies with a post-issue capital of above Rs 10,000 crore would be required to offer at least 5 percent stake in IPO.

At present, all companies with a post-issue capital above Rs 4,000 crore are compulsorily required to dilute at least 10 percent shareholding in the initial public offering (IPO).

It had said there could be a scenario where large issuers may not be compliant with 10 percent minimum public shareholding (MPS) at the time of listing.

Accordingly, the regulator recommended that MPS of 10 percent should be achieved in 18 months by such issuers and 25 percent within three years from the date of listing.

Further, the regulator suggested providing additional time to comply with MPS of 25 percent in case of very large issuers with post-issue market capitalisation of Rs 1 lakh crore and above.

For such issuers, it has been proposed that minimum of 10 percent should be achieved in two years and 25 percent within five years from the date of listing.

Currently, companies need to achieve MPS of 25 percent within three years of listing.

It had sought comments on the proposals in a prescribed format by December 7, 2020.