• IND SEBI issued consultation paper on Review of requirement of minimum public offer and timelines to comply with minimum public shareholding for issuers in terms of Securities contracts (regulation) rules, 1957.
• Proposals aim to facilitate larger IPOs without market oversupply concerns.
• Recent large issuers like Life Insurance Corporation of India (INR 20,557 crore IPO) and Hyundai Motor India (INR 27,859 crore IPO) have demonstrated comparable liquidity to Nifty 100 companies despite lower initial public offerings.

Outline of Proposal

• Proposes relaxed minimum public offer (MPO) requirements for large issuers to address market absorption challenges: companies with post-issue market cap of INR 50k-100k crore would require MPO of INR 1k crore and 8% (vs current 10%).
• Those with post-issue market cap of INR 100k-500k crore would require INR 6,250 crore and 2.75% (vs current INR 5k crore and 5%).
• Extended minimum public shareholding (MPS) compliance timelines: companies with market cap INR 50k-100k crore will have 5 years to achieve 25% MPS (vs current 3 years).
• Companies above INR 100k crore will have a phased approach, with 15% MPS in 5 years and 25% in 10 years if initial public shareholding is below 15%.
• Extended timelines would apply retroactively to existing listed entities not yet compliant with current MPS requirements, though penalties continue until notification of new rules.

Consultation Period

• The consultation period is open until 8 September 2025.