SEBI Introduces Single-Window Clearance for Foreign Portfolio Investors

The Securities and Exchange Board of India (SEBI) has reduced the minimum public offer requirement for very large companies. Firms with a post-issue market capitalisation of over ₹1 lakh crore will now need to list at least 2.75% of their shares, instead of the earlier 5%. 

These companies will also have up to 10 years, instead of five, to meet the 25% minimum public shareholding norm.

Entry System for Foreign Investors

SEBI has approved a single-window clearance mechanism called Single Window Automatic & Generalised Access for Trusted Foreign Investors (SWAGAT-FI). The system is to simplify access for foreign investors considered low risk, such as sovereign wealth funds, pension funds, and large public institutions. It will bring all routes of entry under one registration and reduce repeated compliance requirements.

Anchor Investor Framework

SEBI has expanded the scope of anchor investors in IPOs. Life insurance companies and pension funds will now be included, along with domestic mutual funds. The total reservation for the anchor book has been raised from one-third to 40%. Of this, one-third remains for mutual funds, while the rest is reserved for insurers and pension funds. For IPOs with anchor portions exceeding ₹250 crore, the maximum number of anchor investors has been increased from 10 to 15. 

For every additional ₹250 crore, another 15 investors may be added, with a minimum allotment of ₹5 crore each.

Read More: SEBI Board Meet Highlights: 10 Major Market Reforms You Should Know!

Updates on AIFs

Alternative Investment Funds (AIFs) will have a new category called “AI-only” schemes, open exclusively to accredited investors. These schemes will follow a lighter regulatory framework.

REITs and InvITs Classification

Real Estate Investment Trusts (REITs) will now be treated as equity instruments for mutual funds. This will allow them to be included in equity indices and within equity investment limits. Infrastructure Investment Trusts (InvITs) will remain classified as hybrid instruments.

Conclusion

The measures approved include changes to IPO norms, anchor investor participation, a single-window entry for FPIs, lighter AIF rules, and a reclassification of REITs.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.