In its Board meeting of 17 February 2021, SEBI has decided to (i) relax the Minimum Public Offer (MPO) requirements for large issuers; (ii) repeal the SEBI (Underwriters) Regulations, 1993 and amend the SEBI (Merchant Bankers) Regulations, 1992 and the SEBI (Stock Brokers) Regulations, 1992, to provide for underwriting activities to be carried out under the said regulations itself; and (iii) merge the SEBI (Regulatory Fee on Stock Exchanges) Regulations 2006 with Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, for ease of doing business.

With respect to the relaxation of MPO for large issuers, SEBI has recommended changes to the Securities Contracts (Regulation) Rules, 1957 (SCRR). The said Regulations currently provide that issuers with post issue market capital of at least Rs 4,000 crores or more are required to offer to the public at least 10% of its post issue market capital. Further, such large issuers are required to achieve a minimum public shareholding (MPS) of atleast 25% within three years from the date of listing. Post the amendments to SCRR, for issuers with post issue market capital exceeding Rs.1,00,000 crores, the requirement of MPO will stand reduced from 10% of post issue market capital to Rs.10,000 crores + 5% of the incremental amount beyond Rs.1,00,000 crores. Such issuers will be required to achieve at least 10% public shareholding in two years and at least 25% Public Shareholding within five years from the date of listing. The aforesaid amendments have been made keeping in mind the proposed public offer to be made by Life Insurance Corporation of India.

To refer to the SEBI press release dated 17 February 2021, click here.