Zee Business Exclusive: Government in talks with SEBI to ease IPO norms for companies with m-cap of Rs 1 trillion or above

India's Ministry of Finance is in discussion with the markets regulator Securities and Exchanges Board of India (SEBI) to give relaxations to the big companies with a market capitalisation of Rs 1 lakh crore and above, Zee Business Special Correspondent Tarun Sharma said in his report. 

The government is in talks with SEBI to consider allowing big companies to sell 2.5 per cent stake of their company through public issue, as compared to 5 per cent at present.” 

In the wake of the Life Insurance Corporation of India (LIC) IPO, DIPAM (Department of Investment and Public Asset Management) pointed to the need for a relook of the current stake sale percentage for the big firms. The purpose of this relook is to assess if the markets will be able to digest a chunk as large as this, from the public issue of such large companies, Sharma said in his report. 

In LIC IPO, the government was earlier mulling to sell around a 5 per cent stake as per the SEBI norms, however, through a special resolution, it divested a 3.5 per cent stake, with an aim to raise around Rs 21000 crore IPO, which is scheduled to close on Monday, May 9, 2022. 

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बड़ी कंपनियों के लिस्टिंग के नियम होंगे आसान...

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बड़ी कंपनियों के IPO में हिस्सा बिक्री 2.5% करने पर विचार

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Besides, Sharma said, the government is also in discussion to increase the period of minimum shareholding norms to 7 years from 5 years at present, mainly for the big companies. This may give time to companies to meet the SEBI’s minimum shareholding rules, given the acumen of these firms. 

The market regulator, some time ago through its discussion paper had recommended reducing the 5 per cent stake sale norm for big companies to half. The Government did not deem it fit to do this, he said adding that the LIC IPO experience has been able to provide this learning,.

The government is now discussing the issue with SEBI, Sharma further said. 

The managing editor Anil Singhvi called it a big news for the large companies like LIC. He opined that the relaxations will be fruitful for the big companies to launch their public issue soon.