Sebi facilitates IPO normal for large companies, expands anchor investor pool

Mumbai (Maharashtra) [India]September 13 (Ani): The Securities and Exchange Board of India (Sebi) has approved approved changes to public offerings, IPO awards, related party transactions and access to foreign investors, aimed at facilitating market compliance and broadening the market participation. For many large issuers with a market cap over £ 1 lakh crore, SEBI has recommended amendments to the rules for security contracts (regulation), 1957, to weaken the requirements of the minimum public shareholding (MPS). Such companies can now get a list with a lower public float and will get extensive timelines to meet the 25 percent MPS normal. If public shareholding in listing is below 15 percent, it must be increased to 15 percent within five years and to 25 percent within ten years. If it is 15 percent or more in the listing, the 25 percent threshold must be met within five years. For issues of more than 5 Lakh Crore market cap, similar timelines will apply. The regulator also cleared changes to the SEBI (issue of Capital and Disclosure Requirements) regulations, 2018, which reviews the norms for anchor investors. Life insurance companies and pension funds will now be included in the reserved anchor investment portion, along with mutual funds. The overall anchor discussion was improved from one -third to 40 percent, with a third reserved for mutual funds and the rest for insurers and pension funds. The cap on the number of anchor awards has also been relaxed to enable greater flexibility for large FPIs that run various funds. The SEBI board, among other things, the SEBI Council approved the amendments of the Business Amendments to the Related Party Transaction (RPT) rules under LODR, which set up scale-based thresholds and simplified the revelation norms. The regulator has allowed Retail Schemes in IFSCs with Indian sponsors to register as FPIs, and has cleared the Swagat-Fi framework to streamline access for reliable foreign investors such as sovereign wealth funds and pension funds. The relief coincides with an increase in international outflow in recent months, fueled by high US rates, poor profitability and high valuations. The new rules have reduced the maximum exit load in mutual funds from 5 percent to 3 percent, while the incentives of new distributors for women investors and investors are introduced from B-30 cities. Sebi reclassified Reit’s as stock exchange stock exchanges in mutual fund, enabling higher participation and possible index inclusion. It also reduced the minimum investment threshold for large value funds (LVFs) under AIFs from £ 70 crore to £ 25, while creating a new category of AI-legitimate funds with regulatory flexibility. The market regulator has cleared a proposal to establish local offices in the capitals of the state such as Jaipur, Lucknow, Hyderabad, Bengaluru and others to strengthen investor outreach. The new decisions sharpened management norms for market infrastructure institutions (MIIs), which instructed two executive directors with supervision of compliance and risk. (Ani)