Booster for IPO-headed start-ups: SEBI reduces lock-in period for promoters

BENGALURU:  The Securities Exchange Board of India(SEBI) on Friday decided to reduce the lock in-period for the promoters and other investors of the companies post its initial public offering from the current three years to a period of eighteen months under specific circumstances. 

The markets regulator has also decided to move away from the conventional promoter or promoter group  term to the person in control, which is in line with the structures of the new-age tech firms where the founders/ promoters aren’t necessarily the majority shareholders.

“The definition of promoter group shall be rationalized, in case where the promoter of the issuer company is a corporate body, to exclude companies having common financial investors.  The disclosure requirements in the offer documents, in respect of Group Companies of the issuer company, shall be rationalized to, inter-alia,exclude disclosure of financials of top 5 listed/unlisted group companies.

These disclosures will continue to be made available on the website of the group companies,” it said.
In case of the reduced lock-in period, SEBI has said that the same will apply to those public issues where the objective is the offer for sale( secondary sharesale of the investors),or the issue is aimed at raising of funds for other than r capital expenditure for a project.