Minimum Public Offer (MPO) and amendment its amendment in Securities Contracts (Regulation) Rules, 1957:
This amendment is designed to make large IPOs more manageable and attractive by easing the immediate dilution burden on promoters. By introducing tiered thresholds, lowering the minimum public offer for mega-cap issuers, and extending timelines to reach 25% public shareholding, SEBI reduces the risk of supply shocks that can depress post-listing prices. At the same time, the use of absolute value floors (₹1,000–₹15,000 crore) ensures sufficient free float for liquidity, striking a balance between market stability and broadening investor participation.
Revised MPO / Minimum Public Shareholding (MPS) framework (post-issue market capitalization):
SEBI ICDR – Ease of Doing Business & Institutional Participation
SEBI has broadened the anchor investor participation by easing participation for large FPIs operating multiple funds and providing structured and consistent participation opportunities to long-term institutional investors such as life insurers and pension fund.
Anchor Investors:
- Up to 60% of the QIB portion can be allocated to Anchor Investors (unchanged).
- 40% of the anchor portion is now reserved for long-term domestic institutions:
- One-third for Domestic Mutual Funds (DMFs).
- 7% earmarked for Life Insurance Companies (IRDAI-registered) and Pension Funds (PFRDA-registered).
- Any shortfall in this reserved portion is reallocated to DMFs.
Number of Anchor Investors:
- Allocation ≤ ₹250 crore → minimum 5, maximum 15 anchors.
- For every additional ₹250 crore → up to 15 additional anchors permitted.
- Minimum allotment per anchor: ₹5 crore.
Dropped proposal:
The earlier plan to reduce retail allocation from 35% to 25% (and increase QIB share from 50% to 60% for IPOs >₹5,000 crore) has been withdrawn.
SEBI LODR Amendments
Related Party Transactions (RPTs)
Scale-based thresholds for material RPTs
- Up to ₹20,000 crore turnover → 10% of annual consolidated turnover.
- ₹20,001–₹40,000 crore → ₹2,000 crore + 5% of turnover above ₹20,000 crore.
- Above ₹40,000 crore → Lower of ₹3,000 crore + 2.5% of turnover above ₹40,000 crore (OR) ₹5,000 crore.
Subsidiary-level audit committee approvals
- With audited financials → lower of 10% of standalone turnover or listed-entity materiality threshold.
- Without audited financials → lower of 10% of share capital + securities premium or listed-entity threshold.
Simplified disclosure for small-value RPTs
- If RPT value < lower of 1% of consolidated turnover or ₹10 crore, only minimal disclosures required.
Other changes
- Incorporated omnibus approval validity into LODR (Reg 23(4)).
- Exemptions for retail purchases by directors/KMPs at arm’s length.
- Clarification: “holding company” in Reg 23(5) means “listed holding company.”
Listed Debt Entities
Issuers of listed non-convertible securities may send a weblink to annual reports (instead of hard copies) to investors without registered email IDs.
REITs & InvITs
REITs reclassified as “Equity” for mutual fund investment purposes (aligning with global practice). → Raises mutual fund limits for REITs.
InvITs retained as “Hybrid”– MF investment limits for hybrids now available exclusively to InvITs.
Strategic Investor category expanded to include:
- Family trusts (net worth >₹500 crore).
- Middle, upper & top layer NBFCs.
- All QIBs, PFs, PFRDA-registered pension funds, AIFs, State Industrial Development Corporations (SIDCs).
FPI-Related Amendments
SWAGAT-FI Framework: Single-window automatic access for “trusted” foreign investors (Govts, sovereign funds, regulated public retail funds like mutual funds, insurers, pensions).
India Market Access Portal: New website providing FPI registration guidance, SEBI/RBI regulations, taxation & repatriation rules, roles of market participants.
FPI Regulations, 2019 – Ease measures:
- Registration of retail schemes as FPIs (with Indian sponsor/manager).
- Aligning contribution limits with IFSCA.
- Allowing Indian mutual funds to invest in overseas MF/UT schemes.
