Sebi Board to Mull IPO Norms, FPI Rules

Mumbai, Sep 11 (PTI) Markets watchdog Sebi's board is likely to discuss a raft of regulatory reforms during its upcoming meeting on Friday.

These measures included relaxing the minimum IPO requirements for very large companies, and also extending the timeline for them to meet minimum public shareholding norms, sources said.

Other key items on the agenda included simplifying compliance for foreign portfolio investors (FPIs), relaxing the regulation for accredited investors in certain alternative investment funds (AIFs), expanding the scope of rating agencies' activities, and granting equity status to REITs and InvITs, they added.

Several of these proposals have already been floated for public consultation, indicating a broader push towards refining the regulatory landscape.

This would mark the third board meeting under the chairmanship of Tuhin Kanta Pandey, who assumed office on March 1.

The board may approve a proposal to encourage large issuers to pursue listings in India.

Under the proposal, for companies with a market capitalisation between Rs 50,000 crore and Rs 1 lakh crore, the new minimum public offer (MPO) will be Rs 1,000 crore and at least 8 per cent of the post-issue capital, with minimum public shareholding (MPS) of 25 per cent to be achieved within 5 years instead of the present three years.

For issuers with a market capitalisation between Rs 1 lakh crore and Rs 5 lakh crore, the MPO will be Rs 6,250 crore and at least 2.75 per cent of the post-issue capital, with MPS deadlines extended up to 10 years depending on shareholding levels.

For companies with a market capitalisation above Rs 5 lakh crore, the proposed MPO will be Rs 15,000 crore and at least 1 per cent of post-issue capital, with a minimum dilution of 2.5 per cent.

This means companies can list with smaller IPOs initially, while gradually increasing their public shareholding over a longer period, reducing the immediate burden of large-scale equity dilution.

The board may also clear a proposal on introducing a single window access for low-risk foreign investors seeking to participate in the Indian securities market. This is aimed at simplifying compliance and enhancing the country's attractiveness as an investment destination.

The new framework -- Single Window Automatic & Generalised Access for Trusted Foreign Investors (SWAGAT-FI), if implemented, would provide easier investment access to low-risk foreign investors, enable a unified registration process across multiple investment routes and reduce repeated compliance and documentation for such entities.

The low-risk foreign investors identified by Sebi include government-owned funds, central banks, sovereign wealth funds, multilateral entities, highly regulated public retail funds, and appropriately regulated insurance companies, as well as pension funds.