Govt Eased Listing Norms for Companies having M-cap over Rs 1 lakh crore

After the Securities and Exchange Board of India’s (SEBI) approval over the amendment of The Securities Contracts (Regulation) Rules, Companies that have a market capitalization (M-Cap) of more than Rs 1 lakh crore at the time of Listing are now enabled to sell just 5

percent of Their shares.

•The issuer companies should reach a public Shareholding of 10 percent within 2 years of Listing and 25 percent within 5 years of listing.

•The amendments became beneficial to then Government of India for the proposed IPO (Initial public offering) of Life Insurance Corporation (LIC), as the minimum divest isreduced to 5 percent than the earlier norms of 10 percent.

Background:

i.In March 2021, SEBI along with the Department Background of Economic Affairs under the finance ministry,

amended the Securities Contracts (Regulation) Rules and eased the listing norms for large Companies and enabled them to divest a Minimum of 5 percent in the IPO, instead of 10 Percent.

ii.lt has also increased the term for raising the public float to 25 percent, to 5 years instead of 3 years.

About Securities and Exchange Board of India (SEBI):

Establishment– 1992

Headquarters– Mumbai, Maharashtra

Chairman– Ajay Tyagi

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