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Tag: sebi

  • Ola Electric Secures Board Approval to Raise INR 1,500 Crore via Securities

    In an exchange statement on 25 October, Ola Electric Mobility stated that the board had authorised funding up to INR 1,500 crore through the issuance of securities. A plan to raise money through the issuance of shares or convertible securities, including warrants, through rights issues, qualified institutional placements, private placements, or any other method allowed by applicable laws has been reviewed and approved by the board, according to the Bengaluru-based electric vehicle manufacturer. No more than INR 1,500 crore will be raised in total. The EV manufacturer did not reveal why the money was being raised.

    Ola’s Fund Raising History

    The board of Ola Electric authorised the issuing of Non-Convertible Debentures (NCDs) or any other suitable debt securities on May 22 of this year in order to raise 1,700 crore. Additionally, the business stated that it will raise money through working capital facilities and term loans.

    The company had stated in a filing that the Board of Directors of Ola Electric Mobility Limited (“the company”), at its meeting on May 22, 2025, has, among other things, considered and approved the proposal of fundraising by borrowing funds within the borrowing limits approved by the shareholders of the company. This fundraising will be conducted through the issuance of Non-Convertible Debentures (NCDs) or any other eligible debt securities in one or more tranches, on a private placement basis, or through such other methods as may be permitted under applicable laws.

    Ola Electric to Expand Through Fund Raising

    Ola Electric was founded in 2017 and raised more equity when it went public in August 2024. Market share erosion and regulatory enquiries, such as discrepancies between reported sales and car registrations, have been challenges for the company since listing.

    Due to increased competition from car giants like Bajaj Aito and TVS Motor Company, the company’s market share has also decreased. As the electric scooter manufacturer struggled with a steep decline in sales, Ola Electric reported a larger net loss for the April–June quarter (Q1) of 2025–26 (FY26). The company’s consolidated loss for the same time last year was INR 428 crore, up 23% from INR 347 crore.

    Quick Shots

    •Ola
    Electric’s board has approved raising INR 1,500 crore through shares or
    convertible securities.

    •Total
    amount to be raised capped at INR 1,500 crore.

    •In
    May 2025, Ola Electric raised INR 1,700 crore via Non-Convertible Debentures
    (NCDs) or other debt securities.

    •Additional
    funds were raised through working capital facilities and term loans.

    •Founded
    in 2017, went public in August 2024.

    •Faces
    market share erosion and regulatory scrutiny over sales vs. registration
    discrepancies.

    •Q1
    FY26 net loss: INR 428 crore (up 23% from INR 347 crore last year).

    •Competition from Bajaj Aito and TVS
    Motor Company impacting sales and market share.

  • Shadowfax IPO Gets SEBI Clearance as Flipkart-Backed Firm Prepares Market Debut

    According to documents published on the Securities and Exchange Board of India’s (Sebi) website, Flipkart-backed logistics company Shadowfax Technologies has been given the go-ahead to move on with its IPO. In the week ending October 10, Sebi released its comments regarding the company’s pre-filed draft.

    In July, Shadowfax filed its draft red herring prospectus under Sebi’s pre-filing procedure, which allowed the company to test investor interest and fine-tune offering details without revealing critical company information to the public. According to sources, Shadowfax is anticipated to submit an amended draft prospectus in the days ahead now that regulatory clearance has been obtained.

    How Shadowfax Plans to Execute its IPO Listing

    By combining a new issuance with an offer for sale by current shareholders, the offering is anticipated to raise between INR 2,000 crore and INR 2,500 crore. The IPO might value the company at over INR 8,500 crore, according to reports. This price is a substantial premium over its February 2025 financing round valuation of almost INR 6,000 crore, indicating investor confidence in the future potential of the logistics industry.

    The company raised primary and secondary capital at an approximate valuation of INR 6,000 crore in February 2025, which was the last time it raised funds. According to insiders, the company intends to use the money raised from the new issuance to expand its network operations, boost growth, and increase capacity.

    How Shadowfax Plans to Use Proceeds?

    According to insiders, the company intends to use the money raised from the new issuance to expand its network operations, boost growth, and increase capacity. About 75% of the company’s revenue comes from the e-commerce division, which puts Shadowfax in a strong position to profit from India’s expanding online retail market.

    The rest is derived from hyperlocal delivery and rapid commerce. Prominent investors like Flipkart, TPG, Eight Roads Ventures, and Mirae Asset Ventures support Shadowfax. Several Indian logistics and delivery firms, such as Delhivery, XpressBees, Ecom Express, Blue Dart, and Shiprocket, compete with it. In fiscal 2024, the company’s revenue increased by 33.2% to INR 1,885 crore, but its losses decreased significantly to INR 11.8 crore, which was roughly 92% less than the year before.

    Quick Shots

    •Flipkart-backed
    Shadowfax Technologies secures SEBI clearance to move ahead with its India
    IPO.

    •SEBI
    issued its observations in the week ending October 10, 2025, as per filings
    on its website.

    •Shadowfax
    had filed its draft red herring prospectus in July under SEBI’s pre-filing
    route.

    •The
    logistics startup is expected to raise INR 2,000–INR 2,500 crore through a
    fresh issue and offer for sale.

    •The
    IPO may value Shadowfax at over INR 8,500 crore, up from INR 6,000 crore in
    its February 2025 funding round.

    •Proceeds
    from the IPO will be used to expand network operations, boost growth, and
    increase capacity.

  • SEBI Plans to Relax Rules, Paving Way for Greater NRI Investment in Indian Stocks

    Tuhin Kanta Pandey, the chairman of the Securities and Exchange Board of India (SEBI), announced on 11 October that the market watchdog is simplifying regulatory procedures to facilitate NRI investments in Indian equities markets. In order to eliminate the need for NRIs to return to India in order to fulfil know-your-customer (KYC) standards, the regulator is attempting to streamline the process.

    At a function hosted by the Bombay Stock Exchange Brokers’ Forum on October 11, Pandey stated that SEBI has not yet created a simple and safe KYC access system for NRIs to enable their involvement in the securities market. This will be the regulating body’s first priority.

    SEBI Collaborating with RBI and UIDAI

    Pandey stated that SEBI is working with the Unique Identification Authority of India (UIDAI) and the Reserve Bank of India (RBI) to develop a system that would allow NRIs to complete their KYC verification over video conversations rather than needing to return home. Notably, there are more than 3.5 crore non-resident Indians (NRIs) worldwide, and India is the biggest beneficiary of remittances worldwide, with $135 billion received in FY25.

    According to Pandey, SEBI’s “immediate goal” is to make the FPI registration process quick and easy by making it entirely portal-based, because the agency previously agreed in September to establish a single window for trusted foreign portfolio investors (FPIs) with less stringent compliance standards. In order to put it into effect, he continued, SEBI is already consulting its stakeholders.

    When it comes to enabling registration, SEBI wants to be among the best in the world. To enable digital registration, SEBI, RBI, and the Income Tax Department would need to collaborate, according to Pandey, who characterised the project as a “process issue” rather than one resulting from hazards. Speaking to the broker community, Pandey stated that SEBI will finish revising broker laws by the end of December.

    SEBI to Device Framework to Prevent Cybercrime

    According to Pandey, SEBI will speak with market infrastructure organisations before issuing instructions on keeping an “air gap” in order to improve cybersecurity. He went on to say that SEBI has put in place a redundancy model for clearing corporations, which enables operations to continue without interruption in the event that one clearing corporation fails, and that market infrastructure institutions are being put to the test through live disaster recovery drills.

    “As with stockbrokers, we are also looking at implementing a safety net at a depository participant in the event of an outage,” Pandey stated. He added that the data warehouse system has been redesigned to create new role-based alerts to detect fraudulent trades in bulk deals and identify pump-and-dump trends. He also mentioned that SEBI is moving from reactive supervision to predictive oversight in the surveillance space.

    As per Pandey, high-frequency and algorithmic trading have grown significantly in recent years and now make up a sizable portion of volumes in the derivatives and equity markets.

    Quick Shots

    •SEBI
    to simplify NRI investment norms to make it easier for Non-Resident Indians
    to invest in Indian equity markets.

    •NRIs
    may soon be able to complete KYC verification via video calls, eliminating
    the need to visit India.

    •3.5
    crore NRIs globally — India remains the top recipient of remittances at $135
    billion in FY25.

    •SEBI
    aims to make foreign portfolio investment registration fully online and
    faster.

  • SEBI Updates Block Deal Regulations: Key Changes Investors Must Know

    In an effort to improve the efficiency and transparency of major trade execution, the Securities and Exchange Board of India (SEBI) has released a circular for the implementation of a revamped block deal framework for stock exchanges. In order to prevent price manipulation, the block deal mechanism permits pre-negotiated agreements between parties to be carried out on the exchange during certain windows and under stringent guidelines. With a minimum order quantity of INR 25 crore, the price range will be ±3% of the reference price.

    According to current standards, the minimum order size is INR10 crore, and the pricing range is ±1%. The order size was last adjusted by SEBI in October 2017. Since orders less than INR 25 crore will occur in the regular market, the higher threshold is anticipated to increase liquidity.

    Two Specific Windows of Block Deal

    There are two distinct times that block deals are available: 8:45 AM to 9:00 AM in the morning and 2:05 PM to 2:20 PM in the afternoon. According to the SEBI circular, the closing price of the stock the day before would serve as the reference price for executing block deals during the morning window.

    The volume-weighted average price (VWAP) of trades made in the stock on the cash segment between 1:45 and 2:00 PM will serve as the reference price for the afternoon window.

    Before the afternoon session begins, stock exchanges will compute and distribute the relevant VWAP between 2:00 and 2:05 PM. EffectiveDecember 7, 2025, the Sebi circular will be in force. According to the Sebi circular, the aforementioned clauses will also apply to the block deal window during the optional T+0 settlement cycle.

    The 1st Framework was Introduced in 2005

    As markets have expanded and block deal sizes have increased, regulations pertaining to these transactions have been re-examined. Since its initial release in 2005, the framework has undergone a number of reviews.

    Although one of the exchanges had proposed a ±2% price range, a working committee on the matter had recommended a ±5% price range for the morning block transaction window and a ±3% price range for the afternoon trading window.

    The working group had suggested raising the ceiling, citing the nearly threefold increase in benchmark indices over the previous ten years as justification. It was desirable to raise the restrictions since markets were becoming deeper and larger. 90% of block deals were larger than INR 14 crore, 75% larger than INR 26 crore, 60% larger than INR 50 crore, and 50% larger than INR 84 crore, according to SEBI’s analysis of the data from FY25 block deals at the NSE. Therefore, the order size needed to be reviewed.

    Quick Shots

    •Circular issued to enhance transparency and
    efficiency in major stock trades.

    •Threshold increased from INR 10 crore to INR 25
    crore to boost liquidity and prevent market manipulation.

    •New rules applicable from December 7, 2025,
    including optional T+0 settlement cycle.

    •Block deal framework first introduced in 2005;
    reviewed multiple times as markets grew.

  • SEBI Show-Cause Notices Put Spotlight on Reliance Power and Reliance Infrastructure Shares

    Reliance Infrastructure Ltd. and Reliance Power Ltd.’s shares are under scrutiny on 7 October following their clarification of SEBI show-cause notifications regarding suspected violations of the SEBI Act of 1992 and the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003.

    Reliance Power stated in a filing to the BSE that it has no exposure to CLE Private Limited and that it has received a show-cause notice from SEBI regarding Reliance Infrastructure Limited’s stake in the company for suspected violations. According to Reliance Power, the business will act appropriately in this case as directed by law.

    Reliance’s Response to SEBI

    In a different filing, Reliance Infrastructure stated that it had previously revealed on February 9, 2025, that the conflict pertaining to the company’s exposure with CLE Private Limited had been resolved by consent terms filed before the Hon’ble Bombay High Court’s Mediation Centre in accordance with the Mediation Act, 2023.

    Following an eight-month delay, Reliance Infra reported that it has now received a Show Cause Notice from SEBI for allegedly violating the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003, as well as the SEBI Act, 1992. According to the Mediation Act of 2023, the settlement with CLE Private Limited has already been reached and is completely operative. Reliance Infra promised to follow legal advice and take the necessary action in this case.

    Reliance Declaring CPL Issue Now Fully Resolved

    Reliance Infra had earlier on February 9 declared that its dispute with CPL was fully resolved, and as a result, INR 5,777.13 crore in assets and economic interests in CPL’s assets were assigned or transferred to the company. Additionally, INR 726 crore, the decreed amount, was converted into a secured loan with customary representations, warranties, and indemnity in the company’s favour.

    According to Reliance Infra, Reliance Infrastructure Limited and CPL submitted the consent terms under Mediation Application No. 181/2023 to the Hon’ble Bombay High Court in accordance with the Mediation Act, 2023, in order to settle their unresolved disagreements and claims. It stated that all pending claims and disputes against CPL had been fully and definitively settled for INR 6,503.13 crore.

    Quick Shots

    •Reliance Power and Reliance Infrastructure shares
    under scrutiny on October 7.

    •EBI issued notices for alleged violations of SEBI
    Act, 1992 and SEBI Regulations, 2003.

    •Reliance Power confirmed no exposure to CLE Private
    Limited (CPL).

    •SEBI notice linked to Reliance Infra’s stake in
    CPL.

    •Settlement resolved through Bombay High Court
    Mediation Centre under the Mediation Act, 2023.

    •Despite the prior resolution, SEBI issued a notice
    after 8 months.

     

  • Canara HSBC Life Insurance IPO Dates Announced: Check Opening & Closing Schedule

    On October 10, Canara HSBC Life Insurance Company will make its first public offering. On October 14, the initial public offering (IPO), which would be an offer-for-sale (OFS) of 23.75 crore shares, will close. A day before the debut, the company will provide anchor investors a portion of the IPO shares.

    Soon, the price range that has been approved by regulators to start the public offering will be revealed. Promoters Canara Bank and HSBC Insurance will sell off a portion of their holdings under the OFS, while investor PNB will also sell its shares.

    Financial Dynamics of Canara HSBC Life Insurance

    From INR 91.2 crore in fiscal 2023 to Rs 117 crore in fiscal 2025, the profit after tax grew at a compound annual growth rate (CAGR) of 13.26%. It was INR 23.4 crore in the three months that ended in June 2025. Additionally, as of FY25, the embedded value had grown from INR 4272 crore at the end of FY23 to Rs 6111 crore. With a solvency ratio of 200.42% as of June 2025, beyond the required threshold of 150%, Canara HSBC is financially well-capitalised.

    As evidence of its broad reach and the trust that clients have in us for their life insurance needs, the company has so far covered 10.51 million lives. The issue’s book running lead managers are SBI Capital Markets, BNP Paribas, HSBC Securities and Capital Markets (India), JM Financial, and Motilal Oswal Investment Advisors.

    About Canara HSBC Life Insurance and its Operations

    Promoted by Canara Bank, HSBC Insurance (Asia-Pacific) Holdings, a part of the Hongkong and Shanghai Banking Corporation Ltd (HSBC) group, and Punjab National Bank (PNB), another state-owned lender, Canara HSBC Life Insurance Company is a three-way partnership.

    As of March 31, 2024, the business ranked third among led life insurers promoted by the public sector in terms of assets under management (AUM). Canara HSBC Life Insurance Company was founded in 2007 and has since developed into a major bank-led private participant in the Indian life insurance market.

    According to the number of lives covered for Fiscal 2024, it is the second-largest public sector bank-led life insurer in India. According to the insurer’s DRHP, the company’s Annualised Premium Equivalent (APE) has continuously increased, reflecting efforts to broaden its offerings and boost its market presence.

    Quick Shots

    •IPO Dates: Opens on October 10, 2025; closes on
    October 14, 2025.

    •Offer Type: Offer-for-sale (OFS) of 23.75 crore
    shares.

    •Anchor Investors: Allocated shares a day before the
    IPO debut.

    •Price Range: To be announced soon after regulatory
    approval.

    •Promoters Selling Shares: Canara Bank, HSBC
    Insurance, and PNB.

  • SEBI Rejects Hindenburg Allegations, Clears Adani Group Companies of Wrongdoing

    The Securities and Exchange Board of India (SEBI), which oversees the Indian market, has rejected claims made by US short seller Hindenburg Research against Gautam Adani, the chairman of the Adani Group, and the group’s businesses, Adani Enterprises, Adani Ports, and Adani Power.

    The organisation was accused by Hindenburg Research in January 2023 of using three businesses—Adicorp Enterprises, Milestone Tradelinks, and Rehvar Infrastructure—to transfer funds between Adani group enterprises. In two judgements outlining its findings, SEBI stated that there were no infractions and pointed out that the transactions occurred during a period when dealings with unrelated parties did not count as related party dealings. Later, the definition was modified.

    According to a report by news agency PTI, SEBI halted all of its actions against the Adani Group, stating that all loans were paid back, the money was used for the authorised purposes, and there was no evidence of fraud or unfair trade practices.

    Gautam Adani Responds to the Development

    Gautam Adani stated in a post on September 18 that the SEBI’s conclusions confirmed the short seller’s unfounded allegations. In a post on X, he stated that following a thorough examination, SEBI has confirmed what the organisation had consistently said: that the Hindenburg allegations were unfounded.

    The Adani Group has always been known for its honesty and openness.The company is extremely sorry for the investors who lost money as a result of this dishonest and self-serving report. The country deserves an apology from those who propagate incorrect information.The Adani Group is steadfast in its dedication to nation-building, Indian institutions, and Indian citizens. Jayate Satyamev! JAI HIND!

    Former SEBI’s Executive Director Backs Adani Group

    Former SEBI executive director JN Gupta told NDTV that nearly everyone had progressively come to the conclusion that “the Adanis were not on the wrong side” in the years since the Hindenburg report was made public. According to Gupta, this order definitively establishes that the Hindenburg Report was untrue.

    This reveals two things: first, that SEBI’s system has to be improved because it has taken more than two years to reach this judgement, and second, that it believes a lot of things without supporting evidence. The report caused panic among retail investors, who liquidated their holdings and suffered losses.

    The short seller’s claims have been repeatedly denied by the Adani Group, whose founder, Nate Anderson, declared in January that it will be shut down. Gautam Adani has stressed the significance of “rising stronger after every fall” in his remarks regarding Hindenburg’s later impacted jobs.

    Quick
    Shots

    •SEBI says all loans were repaid,
    funds used legally, and no fraud or unfair trade practices occurred.

    •Hindenburg had accused Adani of fund
    transfers via Adicorp Enterprises, Milestone Tradelinks, and Rehvar
    Infrastructure.

    •SEBI noted transactions occurred
    before rules on related-party dealings were revised.

    •Adani says verdict proves allegations
    were baseless and seeks apology for investor losses.

  • Groww Seeks to Raise INR 6,000–7,000 Crore Through Revised IPO Filing

    Groww, an online investing platform, has submitted a revised draft prospectus for an IPO of INR 6,000–7,000 crore to the Securities and Exchange Board of India (SEBI). The transaction would consist of an offer for sale (OFS) of 574 million shares valued at about INR 5,000–6,000 crore and a new issuance of INR 1,060 crore.

    As previously reported by ET, the Bengaluru-based company plans to IPO in November at a valuation of $7-9 billion. Peak XV Partners, Y Combinator, Ribbit Capital, Tiger Global, and Kauffman Fellows Fund are among the investors taking part in the OFS. One million shares will also be sold by the company’s founders, Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal, who together own 27.96% of the business.

    After submitting confidential draft documents to the market regulator in May, Groww was granted permission by SEBI to proceed with its initial public offering (IPO) last month.

    Groww’s Financial Performance in FY25–FY26

    Kotak Mahindra Capital Company, JP Morgan India, Citigroup Global Markets India, Axis Capital, and Motilal Oswal Investment Advisors are among the issue’s book running lead managers. The company’s net profit increased 11% from the previous year to INR 1,824 crore in FY25 and INR 378 crore in the June quarter of FY26. FY25 revenue was INR 4,056 crore, a 31% increase from the previous year. Groww intends its recent expansion into commodities, wealth management, margin trading facilities (MTF), and loans secured by shares to fuel its future growth.

    The company’s NSE active clientele increased from 10.92 million to 12.58 million as of June 30. Derivative active users decreased 28% year over year in Q1 FY26 as a result of the regulator’s increased scrutiny of futures and options (F&O) trading, while fees and commission income decreased 17.5%.

    Nonetheless, Groww’s average daily turnover increased 18.2% to INR 9,276 crore during that time, and its retail F&O market share increased from 9.69% to 14.43%. After executing a reverse flip of its parent company from the US to India, Groww is one of the first firms to pursue an initial public offering (IPO). Based on a recently determined fair market value, the company paid US taxes of INR 1,340 crore ($160 million), which is 30% less than the $3 billion valuation at which it last raised capital in 2021.

    Future Plans of Groww

    Groww has so far raised roughly $596 million in equity capital, according to Tracxn. As per media reports of March 26, it just secured a $200 million round backed by GIC and Iconiq Capital at a valuation of $7 billion. Subject to SEBI’s clearance, the company has also finalised a deal to pay $150 million in cash to acquire the wealthtech platform Fisdom, which is funded by PayU.

    In addition, it is getting ready to launch W, a new wealth management platform aimed at long-term investors, to compete with rivals like Dezerv and Ionic Wealth, which is financed by Angel One. Groww, which began as a mutual fund investment platform when it was founded in 2016 by former Flipkart executives Keshre, Jain, Singh, and Bansal, is currently the largest stockbroker in India by active clients, according to NSE data.

    The platform added 9.45 million new demat accounts between June 2024 and June 2025, whereas the industry added 36.66 million during the same time frame.

    Quick
    Shots

    •Issue structure: OFS of around INR
    5,000–6,000 crore + fresh issue of INR 1,060 crore.

    •Planned IPO in November at $7–9
    billion valuation.

    •Founders to sell 1M shares; currently
    hold 27.96% stake.

    •Reverse flip from US to India led to
    INR 1,340 crore ($160M) US tax payout.

  • SEBI Eases Rules for Foreign Investors and IPOs to Boost Market Participation

    SEBI announced changes on 12 September that will eliminate redundant paperwork for low-risk foreign investors such as sovereign wealth funds, central banks, and retail funds, and loosen minimum dilution requirements for IPO-bound businesses. The easing coincides with an increase in international outflows, which are being fuelled by high US tariffs, poor profitability, and high valuations. In 2025, foreign investors withdrew $11.7 billion from Indian debt and stocks.

    By requiring two executive directors and separating the tasks of regulatory compliance (risk, investor complaints) and vital operations (trading, clearing, settlement), it also strengthened stock exchange governance. The minimum public offer for issuers with a market capitalisation of INR 1–5 lakh crore has been increased from INR 5,000 crore and 5% to INR 6,250 crore and at least 2.8% of the post-issue market capitalisation.

    The 25% minimum public shareholding requirement will now be met by companies listing with less than 15% public float in 10 years, compared to 5 years for those launching with 15% or more. Once the government notifies them, the lenient deadlines will also apply to businesses that have not yet complied with the current regulations.

    New Rules for Anchor Investors and Public Float

    The regulations governing anchor investors have been relaxed. With life insurance and pension funds holding a portion of the reserved pool, the overall quota has increased from one-third to 40%. A third will be set aside for mutual funds, and any money that isn’t subscribed to by insurers or pension funds would go back to them.

    With a minimum allotment size of INR 5 crore, the number of acceptable anchor investors has also increased. In order to increase India’s appeal to foreign investors, SEBI approved the Swagat-FI framework, which grants single-window access to “trusted” foreign portfolio and venture investors, including sovereign funds, central banks, and regulated retail funds, with a 10-year registration and KYC cycle instead of a 3-year one.

    Additionally, they will not be subject to the 50% aggregate contribution cap that applies to resident Indians, OCIs, and NRIs. In addition, the India Market Access portal was introduced by SEBI and market infrastructure organisations to offer comprehensive instructions on FPI registration, documentation, and compliance.

    To promote inflows from smaller cities and female investors, the regulator changed distributor incentives and lowered the maximum exit load in the mutual fund industry from 5% to 3%.

    SEBI’s Push to Boost Mutual Fund Participation

    With the introduction of a scale-based method for shareholder approval, SEBI has streamlined the rules governing related-party transactions. In addition to increased commissions for onboarding new female investors, distributors can receive up to 1% of the initial application value, or INR 2,000, for new investors from cities outside of the top 30.

    Low-value transactions do not need to be disclosed, while high-value acquisitions now need a vote. Transactions above 10% of turnover require clearance for businesses with a turnover of INR 20,000 crore. From INR 1,000 crore to INR 5,000 crore, the bar for companies having a turnover of INR 40,000 crore has been lifted dramatically.

    Quick
    Shots

    •For issuers with market cap INR 1–5 lakh crore →
    minimum public offer raised to INR 6,250 cr & 2.8% stake.

    •Companies with <15% float get 10 years (vs 5
    years) to meet 25% public shareholding.

    •Foreign investors exempt from aggregate
    contribution limits faced by residents/NRIs/OCIs.

    •New one-stop guide for FPI registration,
    documentation, and compliance.

  • SEBI Plans Relaxation of Minimum Shareholding Rules to Boost Market Expansion

    In a consultation paper published on August 18, the Securities and Exchange Board of India (SEBI) suggested expanding the flexibility of minimum public shareholding (MPS) and minimum public offer (MPO) for businesses looking to list with the goal of “simplifying fundraising by issuers in India”.

    Key Highlights from SEBI’s Consultation Paper

     In the paper, SEBI suggested raising the MPO for businesses that are getting close to listing, increasing the MPS after listing, and extending the timeframes to accomplish the latter.

    Post-issue market capitalisation (m-cap) threshold buckets should be changed to INR 4,000 crore to INR 50,000 crore, INR 50,000 crore to INR 1 lakh crore, INR 100,000 crore to INR 5 lakh crore, and above INR 5 lakh crore, according to the document. It is currently at INR 1 lakh crore, INR 4,000 crore, and much beyond INR 1 lakh crore. Additionally, SEBI has extended the deadline for MPS compliance.

    Proposed Changes in Minimum Public Shareholding (MPS) Rules

    According to SEBI, it is suggested that the current three-year period for meeting the MPS threshold of 25% be extended to five years from the date of listing for issuers having a post-issue market capitalisation of more than INR 50,000 crore but less than or equal to INR 100,000 crore.

    Five years was suggested as the time frame to reach 15% ownership, while ten years was suggested as the time frame to reach 25% post-listing MPS. The capital market regulators also asked for public input on lowering the MPO for buckets from INR 50,000 crore to INR 1 lakh crore.

    According to the Securities Contract Regulations Rules (SCRR), SEBI also stated in the paper that issuers with a post-issue market capitalisation of more than INR 100,000 crore are required to guarantee MPO of INR 5,000 crore and at least 5% of the post-issue share capital. They are also required to increase their public shareholding to at least 10% within two years of the date of listing and then to a minimum of 25% within five years.

    Impact on Large-Cap IPOs in India

    According to SEBI, it might be challenging for big issuers to dilute a sizable shareholding through an IPO since the market might not buy back the shares sold and might deter subsequent listings.

    Additionally, it stated that “requiring a significant dilution of equity to satisfy the MPS requirements right after the IPO may result in an excess of shares in the market, impacting share prices irrespective of the firm’s financial stability.”

    Industry experts feel that this is a welcome proposal for very large market cap companies, as it will reduce requirements to seek ad hoc or one-time SEBI relaxations.

    Quick
    Shots

    •Large-cap issuers (INR 50,000 Cr – IN
    1 Lakh Cr) to get 5 years to reach 25% MPS.

    •15% in 5 years, 25% in 10 years (for
    mega-cap issuers).

    •Encourages more big-ticket listings
    in India.

    •Reduces need for case-by-case SEBI
    exemptions.