Capital markets regulator Securities and Exchange Board of India (SEBI) is set to review key regulatory changes at its board meeting on Friday, including relaxed stake dilution norms for large companies, and amended allocation norms for anchor investors in IPOs.
The regulator is considering stake dilution norms to permit large firms to launch smaller initial public offerings. SEBI also considers extending deadlines to comply with minimum public shareholding requirements.
Companies with post-issue market capitalisations exceeding Rs 5 lakh crore may need to maintain a minimum float of Rs 15,000 crore plus 1 per cent, subject to a minimum of 2.5 per cent public float.
Firms valued between Rs 1 lakh crore and Rs 5 lakh crore could be required to issue at least Rs 6,250 crore plus 2.75 per cent. Depending on their shareholding levels, they could get up to 10 years to meet the minimum public shareholding mandate, according to reports.
The board plans to expand the anchor investor pool for IPOs, increasing reserved allocations from 33 per cent to 40 per cent by adding insurance and pension funds to mutual funds. For IPOs with an issue size of Rs 250-Rs 500 crore, the number of permitted anchor allottees is proposed to increase from 25 to 30.
The meeting is also likely to take up steps to simplify compliance for foreign portfolio investors (FPIs), ease rules for accredited investors in certain alternative investment funds (AIFs), widen the scope of activities for rating agencies, and give equity status to Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs).
Further, multiple reports said the SEBI board is likely to discuss and approve a new threshold-based system for determining the materiality of related party transactions (RPTs). The move aims to align compliance requirements with the turnover of listed entities.
SEBI may release a consultation paper within a month on phasing out weekly futures and options (F&O) contracts.
The regulator is planning a shift to monthly expiries with a defined transition plan and may also look at introducing same-day expiry across stock exchanges.
Meanwhile, earlier this week, SEBI announced that it has amended its rules to allow promoters to retain employee stock options (ESOPs) granted at least one year before filing IPO papers.
