Government eases listing norms for companies having over Rs 1 lakh crore m-cap

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NEW DELHI: Firms which have a market capitalisation of greater than Rs 1 lakh crore on the time of itemizing can now promote simply 5 per cent of their shares, with the most recent modification in guidelines, a transfer that shall be useful for the federal government in the course of the proposed preliminary public supply of LIC.
Such entities shall be required to extend its public shareholding to 10 per cent in two years and lift the identical to a minimum of 25 per cent inside 5 years.
The division of financial affairs underneath the finance ministry has amended the Securities Contracts (Regulation) Guidelines.
Yash Ashar, companion & head – capital markets at regulation agency Cyril Amarchand Mangaldas, mentioned there have been some considerations that diluting 10 per cent in very massive IPOs (Initial Public Offers) sooner or later perhaps very difficult.
“With this modification, firms which at itemizing may have a market cap better than Rs one lakh crore will be capable to prohibit their supply measurement to five per cent (as in comparison with 10 per cent) and it will guarantee extra flexibility for them.
“This can be a balanced modification the place the regulator has additionally clarified that such issuer firms ought to attain public shareholding of 10 per cent inside two years of itemizing and 25 per cent inside 5 years of itemizing,” he mentioned.
Whereas noting that this modification is not going to change something for many of the points in India, it will likely be “useful to the Authorities of India for the proposed IPO of LIC”.
In accordance with him, the entire modification is a progressive modification to recognise that Indian firms are actually greater than they beforehand had been.
In February this 12 months, Sebi’s board authorised enjoyable the minimal public supply norms for big issuers.
In the meantime, underneath the most recent amended guidelines, “each listed firm shall preserve public shareholding of a minimum of 5 per cent because of implementation of the decision plan authorised underneath part 31 of the Insolvency and Chapter Code, 2016”.
Part 31 pertains to approval of decision plans.
The notification amending the principles was issued on June 18.

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