SEBI Proposes Relaxation in IPO and MPS Rules for Large Issuers

India’s markets regulator, SEBI, has proposed a broad set of relaxations aimed at easing listing requirements for large issuers. The key proposals include lowering minimum public offer thresholds and extending timelines for meeting minimum public shareholding (MPS) norms.

As per a consultation paper released on Monday:

• Companies with a post-issue market capitalisation between ₹50,000 crore and ₹1 lakh crore may see the minimum public offer requirement reduced from 10% to 8% of post-issue share capital.
• For companies with a market valuation above ₹1 lakh crore and up to ₹5 lakh crore, SEBI has proposed a revised minimum public offer of ₹6,250 crore, and at least 2.75% of post-issue share capital, down from the current 5%.
• Companies exceeding ₹5 lakh crore in market capitalisation would be required to offer at least ₹15,000 crore and 1% of post-issue capital, with a minimum dilution of 2.5%.

Recommendations by SEBI

1. Issuers with market capitalisation between ₹50,000 crore and ₹1 lakh crore may get five years to meet the 25% MPS requirement, instead of the current three years.
2. For companies with a post-issue market capitalisation above ₹1 lakh crore, SEBI has proposed a phased approach:

• If public shareholding is below 15% at the time of listing, it must be increased to at least 15% within five years, and further to 25% within ten years.
• If public shareholding is above 15% on the date of listing, the 25% MPS must be achieved within five years.

Also Read: Clean Max Enviro Energy Solutions Files DRHP for ₹5,200 Crore IPO

Retail Quota at 35%: SEBI

SEBI stated that this staggered timeline would allow very large issuers the flexibility to meet public float requirements without putting excessive pressure on market absorption.

Additionally, SEBI has decided to retain the retail quota at 35% for IPO allocations, reversing an earlier plan to reduce it to 25% for large issuances. The regulator said the proposals are intended to promote capital formation, ease fundraising for issuers, and expand investor access to marquee listings. The market regulator has invited market participants on the consultation paper by 8 September 2025.

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