Major Sebi Board Meeting May Reshape IPO, FPI Rules
Sebi board to discuss major regulatory changes Friday.
The Securities and Exchange Board of India (Sebi) is set to hold a pivotal board meeting on Friday to deliberate a series of transformative regulatory reforms aimed at bolstering India’s financial markets. Chaired by Tuhin Kanta Pandey, who took office on March 1, this marks Sebi’s third board meeting under his leadership and promises to reshape the investment landscape for both domestic and foreign players.
A key proposal on the table is easing initial public offering (IPO) requirements for large companies. For firms with a market capitalization between Rs 50,000 crore and Rs 1 lakh crore, Sebi proposes a minimum public offer (MPO) of Rs 1,000 crore and at least 8% of post-issue capital, with a five-year timeline to achieve the 25% minimum public shareholding (MPS), up from the current three years.
Companies with a market cap of Rs 1 lakh crore to Rs 5 lakh crore would have an MPO of Rs 6,250 crore and 2.75% of post-issue capital, with MPS deadlines extended to up to 10 years. For giants exceeding Rs 5 lakh crore, the MPO would be Rs 15,000 crore and 1% of post-issue capital, with a minimum dilution of 2.5%. These changes aim to reduce the immediate financial burden on large issuers while encouraging listings in India.
The board will also consider simplifying compliance for foreign portfolio investors (FPIs) through the Single Window Automatic & Generalised Access for Trusted Foreign Investors (SWAGAT-FI) framework. This initiative targets low-risk investors, such as government-owned funds, central banks, sovereign wealth funds, multilateral entities, regulated public retail funds, insurance companies, and pension funds. SWAGAT-FI promises a unified registration process, reduced documentation, and streamlined compliance to make India a more attractive investment destination.
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Additional reforms include relaxing regulations for accredited investors in certain alternative investment funds (AIFs), expanding the scope of rating agencies’ activities, and granting equity status to Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). Many of these proposals have undergone public consultation, reflecting Sebi’s commitment to a transparent and inclusive regulatory overhaul.
These reforms, if approved, could significantly enhance market accessibility and flexibility, positioning India as a global investment hub while balancing compliance and growth.
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