Capital market regulator Sebi has relaxed the minimum public shareholding norms for big corporates going for an IPO, at the board meet on September 12, chairman Tuhin Kanta Pandey announced during a press briefing.
The board said companies with market capitalization of more than Rs 5 lakh crore can now come out with an IPO as small as Rs 15,000 crore and dilute 2.5% equity stake. The new rules will allow large private companies to offer a smaller share in their proposed IPOs going forward.
For companies with a market capitalisation between Rs 50,000 crore to Rs 1 lakh crore, the minimum public shareholding norms of 25% could now be achieved in five years in comparison to the current three years.
Follow the Live blog for updates from the Sebi press briefing right here
For companies with a post-issue market capitalization above Rs 1 lakh crore, in case the public shareholding is less than 15% on the date of listing, the MPS of 15% must be achieved within five years, and 25% within ten years, Sebi said.
Read More: Sebi allows large firms to launch IPOs with smaller issue size
If the public shareholding is 15% or more on the date of listing, the MPS of 25% must be achieved within five years from the date of listing, said Sebi Chairman Tuhin Kanta Pandey.
| M-cap | Existing Norm | Proposed Provision |
| Rs 50,000 crore-Rs 1 lakh crore | 25% MPS in 3 years from listing | 25% MPS in 5 years from listing |
| Rs 1 lakh crore-Rs 5 lakh crore |
10% MPS in 2 years from listing25% MPS in 5 years from listing | If public share <15% on listing, then 15% MPS in 5 years and 25% in 10 yearsIf public share >15% on listing, then 25% MPS in 5 years from listing |
| Over Rs 5 lakh crore |
10% MPS in 2 years from listing25% MPS in 5 years from listing |
If public share <15% on listing, then 15% MPS in 5 years and 25% in 10 yearsIf public share >15% on listing, then 25% MPS in 5 years from listing |
Sebi said extending the proposed timelines to listed entities will ensure 'consistency and parity' in regulatory treatment. The Board has also recommended that the proposed extended timelines may be made applicable to the existing listed entities that are yet to comply with the MPS requirement.
The companies that are non-compliant with the existing MPS requirements are likely to get more time to achieve the norms after the extended timelines, Sebi said. However, penalties levied or about to be levied by the exchanges may still apply on the listed entities.
Moneycontrol had reported in August 2025 that Sebi has proposed to the board more time for compliance with minimum public shareholding norms. Sebi, in its consultation paper had justified the proposal, stating that the size of IPOs is increasing every year, and flexibility in terms of minimum issue size and timelines to achieve public shareholding for large companies has become challenging.
This was the third board meeting chaired by Tuhin Kanta Pandey, who assumed office on March 1.
Companies have raised more than $10 billion through IPOs in India so far during 2025.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
