On 13 March 2026, IND SEBI revised rules on minimum public shareholding.
- IND SEBI published the Securities contracts (regulation) amendment rules, 2026, which amends rule 19 of the Securities contracts (regulation) rules, 1957, regarding minimum public shareholding (MPS) requirements for companies seeking IPO.
- Follows IND SEBI August 2025 proposed review of large issuer requirements.
Highlights of Amendments
- Introduces a graded framework linking the MPS to the company’s post-issue capital.
- Companies with post-issue capital up to INR 16bn must offer at least 25% of equity or convertible securities to the public.
- For larger companies, the rules prescribe lower percentage thresholds but require minimum public offer values such as INR 4bn, INR 10bn, INR 62.5bn, or INR 150bn depending on capital size.
- Large companies must progressively increase public shareholding to 25% within specified timelines ranging from three to ten years after listing.
- The amendment also addresses companies with superior voting rights shares, provides compliance timelines for existing listed companies, and allows stock exchanges to impose penalties for past non-compliance with public shareholding norms.
Effectiveness
- The amendments are effective from 13 March 2026.
