MUMBAI: India’s securities market regulator last Friday made it easier for very large private companies to go public in one of the world’s top destinations for first-time share sales this year.
Companies with a market capitalisation of more than five trillion rupees (US$56.5bil) can now make an initial public offering (IPO) of as low as 150 billion rupees and dilute a 2.5% equity stake, the Securities and Exchange Board of India (Sebi) said in a statement following its board meeting.
Such companies will be allowed five years to raise the minimum public shareholding to 15% and to 25% in the next five years, according to the Sebi statement.
Until now, IPO-bound large companies were required to dilute a minimum of 5% of their equity and have 10% public shareholding within two years of getting listed.
The new rule, proposed in a discussion paper last month, will allow large private companies such as Reliance Industries Ltd’s telecom unit Reliance Jio Infocomm Ltd and the country’s top bourse, the National Stock Exchange of India Ltd, to offer a smaller slice in their proposed IPOs next year.
Jio could fetch more than US$3bil through its share sale under the new measure, Citigroup Inc had estimated prior to last Friday’s Sebi board meeting.
The regulator said that it will recommend changes to minimum offer size for IPOs to the Finance Ministry for amending the existing regulations.
Furthermore, the relaxed listing rules will likely supercharge first-time share sales in the third busiest destination in the world this year.
Companies have raised more than US$10bil through IPOs in the South Asian nation in 2025, according to data compiled by Bloomberg.
The regulator also relaxed rules for marquee global investors looking to enter the country’s stock and bond markets.
Sovereign wealth funds, central banks, and global mutual funds, among others, will enjoy a so-called single window access intended to unify and streamline market access for “low-risk” global investors, Sebi said in the statement.
The measure seeks to reduce regulatory complexities and enhance India’s global competitiveness as an investor-friendly destination, it said.
Additionally, the move will encourage larger and more stable inflows from institutional investors and boost liquidity in both equity and debt markets, the regulator had said in a discussion paper last month.
Global institutional investors have for long complained to Indian regulators about complex compliance rules that hindered their participation in the country’s public markets. — Bloomberg
