Source: ET
Context:
The Securities and Exchange Board of India (SEBI), under Chairman Tuhin Kanta Pandey, has introduced a set of reforms across IPO norms, foreign portfolio investors (FPIs), real estate investment trusts (REITs), and mutual funds. The aim is to deepen capital markets, boost primary issuance, and ease compliance.
Key Highlights:
IPO and Market Capitalisation Norms
- For companies with market capitalisation between â‚ą1 trillion and â‚ą5 trillion:
- Minimum Public Offer (MPO) set at â‚ą6,250 crore + 2.75% of post-issue market cap.
- If public shareholding <15% at listing:
- 5 years to reach 15% public shareholding.
- 10 years to achieve mandated 25% Minimum Public Shareholding (MPS).
- Public issue norms for issues below â‚ą50,000 crore remain unchanged.
- Anchor Investors:
- An anchor investor is an institutional investor. They enter the game right before an IPO (Initial Public Offering) and they are seen as a booster for companies looking for a successful listing.
- Overall reservation raised from 33.33% → 40%.
- One-third reserved for domestic mutual funds, remainder for life insurers & pension funds.
- Number of permissible anchor investor allottees increased for allocations above â‚ą250 crore.
Foreign Portfolio Investors (FPIs)
- Launch of SWAGAT-FI (single-window framework) for easier registration of low-risk FPIs (e.g., sovereign wealth funds, government-related investors).
- Eligible entities include regulated public funds (mutual funds, insurance cos., pension funds).
- Relaxations:
- Reduced documentation.
- One-time KYC fee of $2,500 for a 10-year block (instead of 3-year cycle).
- Exemption from 50% aggregate contribution cap for NRIs and OCIs.
- Expected to cover 70%+ of FPIs.
REITs and InvITs
- Re-classified as equity for mutual funds → eligible for equity index inclusion.
- Expanded scope of strategic investors to include:
- Provident funds
- Public financial institutions
- Alternative Investment Funds (AIFs)
- State industrial development corporations
Mutual Funds
- Maximum exit load reduced from 5% to 3%, benefiting retail investors.
- Incentives reintroduced for distributors for inflows from beyond top 30 cities (B-30 regions).
Related Party Transactions (RPTs)
- RPT transactions, or Related Party Transactions, are business dealings between a company and its related entities or individuals, such as a parent company and its subsidiary, or a company and the immediate family of its director.
- Scale-based thresholds (based on turnover of listed companies) approved to determine material RPTs.
Other Announcements
- SEBI to consult further on derivatives curbs—no immediate changes.
- Report on conflict-of-interest code expected by end of the month.
