SEBI Proposes Changes to Minimum Public Shareholding Norms for Large IPOs

The Securities and Exchange Board of India (SEBI) concluded its board meeting on September 12, 2025, with key proposals to amend the Minimum Public Shareholding (MPS) norms. The changes are aimed at providing flexibility to companies with higher market capitalisation while maintaining long-term requirements for broader public participation.

MPS Norms for Companies up to ₹50,000 Crore Market Cap

For companies with a market capitalisation of up to ₹50,000 crore, SEBI confirmed that the existing norms will remain unchanged. Such companies must continue to meet the 25% public shareholding requirement within three years of listing.

Extended Timelines for ₹50,000 Crore–₹1 lakh Crore Market Cap Companies

For companies with a market capitalisation between ₹50,000 crore and ₹1 lakh crore, SEBI has proposed extending the timeline for achieving 25% public shareholding from the current three years to five years.

Minimum Public Offer Size for Larger Companies

For companies with a market capitalisation between ₹1 lakh crore and ₹5 lakh crore, SEBI has proposed that the minimum public offer size should be ₹6,250 crore or 2.75% of the post-issue market capitalisation, whichever is higher.

For companies with a market capitalisation above ₹5 lakh crore, the minimum public offer size has been set at ₹15,000 crore or 1% of the post-issue market capitalisation, whichever is higher.

Listing-day Shareholding Requirements

SEBI also introduced guidelines for public shareholding levels at the time of listing.

• If the public shareholding is less than 15% on the day of listing, the company must reach 15% within five years and 25% within 10 years.
• If the public shareholding is 15% or higher at listing, the company must achieve the 25% threshold within five years.

Read More: Sebi extends deadline till December for Karvy investors to file claims

Conclusion

SEBI’s proposed changes to MPS norms introduce differentiated timelines and offer sizes linked to company market capitalisation. While smaller firms continue under existing rules, larger companies are given longer timeframes and scaled offer requirements, ensuring both flexibility for issuers and steady growth of public participation in equity markets.

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