The government has amended the Securities Contracts (Regulation) Rules, 1957, reducing the minimum public shareholding requirement for large companies from 5% to 2.5%.
Under the new rules, companies are categorized differently based on their post-listing valuation. A tier structure has been prepared for this purpose…
- The companies with a value of up to ₹1,600 crore will have to offer at least 25% of their shares to the public.
- ₹1,600 crore to ₹4,000 crore: These companies must offer shares or debentures to the public worth at least ₹400 crore.
- ₹4,000 crore to ₹50,000 crore: the companies must initially offer at least 10% of each type of share or debenture to the public, and they must raise public shareholding to at least 25% within three years.
- ₹50,000 crore to ₹1 lakh crore: it must offer the public shares worth at least ₹1,000 crore and at least 8% of each type, and it must raise public shareholding to 25% within three years.
Relief for companies valued over ₹5 lakh crore
According to the notification, the rules have been made much simpler for very large companies…
- ₹1 lakh crore to ₹5 lakh crore: These companies will have to offer at least 2.75% of their shares to the public at the time of listing.
- Companies valued over ₹5 lakh crore: If a company’s valuation exceeds ₹5 lakh crore, it can list by selling just 1% of its shares. Such companies are allowed to increase their public shareholding to 15% within 5 years and to 25% within 10 years.
After a strong performance in the IPO market in 2025, the market has recently shown some slowdown. Experts say that these government moves will pave the way for large companies to list, which will increase liquidity in the market and provide new investment opportunities for investors. The National Stock Exchange (NSE), which has been waiting for its listing for a long time, will also benefit from these new rules.
