Latest news with #SecuritiesContracts(Regulation)Rule
Economic Times
20 hours ago
- Business
- Economic Times
Sebi proposes to ease IPO norms for large companies
SEBI is considering easing IPO norms for large companies like NSE and Reliance Jio, potentially allowing them to list with smaller floats. For firms exceeding ₹50,000 crore market cap, the minimum share sale could drop to 8%. The regulator also proposes extending the timeline to meet minimum public shareholding norms, aiming to prevent oversupply and stabilize share prices. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Mumbai: The Securities and Exchange Board of India ( Sebi ) is proposing to ease norms for large companies looking to sell shares through an Initial Public Offering (IPO). The regulator has recommended to reduce the minimum proportion of shares (MPS) that such companies must offer to the public in the proposal would allow entities such as the National Stock Exchange (NSE) and Reliance Jio Infocomm, which command multi-billion dollar valuations, to go public with a smaller float."For such large issuers, diluting substantial stake through an IPO can pose challenges, as the market may not be able to absorb such a large supply of shares, which in turn may discourage such issuers from pursuing listings in India," Sebi said in a discussion paper on regulator said for companies with a post IPO market cap above ₹50,000 crore, the minimum share sale would have to be at least 8% from the current 10%. For companies, with a post issue market cap of over ₹1 lakh crore and ₹5 lakh crore, they would have to dilute at least 2.75% and 2.5%, respectively. Now, companies with a post-issue market cap above ₹1 lakh crore had to dilute at least 5% of in its edition dated August 1, 2025, had reported that Sebi is considering a proposal to allow large companies with valuations exceeding ₹1 lakh crore to dilute only 2.5% of their equity regulator has also proposed relaxations in the timeline to meet the minimum public holding issuers with a post issue market capitalisation above ₹50,000 crore, the timeline for compliance with the minimum public shareholding requirement of 25% would be extended to five years from the existing three years from date of for issuers with a post issue market cap above ₹1,00,000 crore, if the public shareholding is less than 15% as on the date of listing, then minimum public holding of 15% can be achieved within five years and 25% within 10 years from date of listing."Mandating substantial equity dilution for meeting the MPS requirements, immediately after the IPO can lead to an oversupply of shares in the market. This anticipation of further dilution may impact the share prices, despite strong company fundamentals, and may adversely impact existing public shareholders," it regulator said it would make recommendations to the finance ministry to amend the Securities Contracts (Regulation) Rule to provide flexibility to large said, this would allow large issuers to undertake fund raising in a phased manner and facilitate issuers to plan and execute fund-raising 2021, the minimum public shareholding rules were introduced. Under these provisions, issuers with a post issue market cap above ₹1 lakh crore are required to dilute at least 5% at the time of the IPO and are mandated to increase their public shareholding to 10% within 2 years and further to 25% within 5 years from date of listing."For very large market cap will reduce requirements to seek ad hoc or one time Sebi relaxations. This move will further ease the pressure on secondary capital markets, where only issuers with genuine capital requirements will tap into for a fund raise," said Arka Mookerjee, partner, JSA Advocates & Solicitors.
Time of India
20 hours ago
- Business
- Time of India
Sebi proposes to ease IPO norms for large companies
Mumbai: The Securities and Exchange Board of India ( Sebi ) is proposing to ease norms for large companies looking to sell shares through an Initial Public Offering (IPO). The regulator has recommended to reduce the minimum proportion of shares (MPS) that such companies must offer to the public in the issue. The proposal would allow entities such as the National Stock Exchange (NSE) and Reliance Jio Infocomm, which command multi-billion dollar valuations, to go public with a smaller float. "For such large issuers, diluting substantial stake through an IPO can pose challenges, as the market may not be able to absorb such a large supply of shares, which in turn may discourage such issuers from pursuing listings in India," Sebi said in a discussion paper on Monday. The regulator said for companies with a post IPO market cap above ₹50,000 crore, the minimum share sale would have to be at least 8% from the current 10%. For companies, with a post issue market cap of over ₹1 lakh crore and ₹5 lakh crore, they would have to dilute at least 2.75% and 2.5%, respectively. Now, companies with a post-issue market cap above ₹1 lakh crore had to dilute at least 5% of equity. ET in its edition dated August 1, 2025, had reported that Sebi is considering a proposal to allow large companies with valuations exceeding ₹1 lakh crore to dilute only 2.5% of their equity base. Live Events Agencies Minimum Public Shareholding The regulator has also proposed relaxations in the timeline to meet the minimum public holding norms. For issuers with a post issue market capitalisation above ₹50,000 crore, the timeline for compliance with the minimum public shareholding requirement of 25% would be extended to five years from the existing three years from date of for issuers with a post issue market cap above ₹1,00,000 crore, if the public shareholding is less than 15% as on the date of listing, then minimum public holding of 15% can be achieved within five years and 25% within 10 years from date of listing. "Mandating substantial equity dilution for meeting the MPS requirements, immediately after the IPO can lead to an oversupply of shares in the market. This anticipation of further dilution may impact the share prices, despite strong company fundamentals, and may adversely impact existing public shareholders," it said. The regulator said it would make recommendations to the finance ministry to amend the Securities Contracts (Regulation) Rule to provide flexibility to large issuers. Sebi said, this would allow large issuers to undertake fund raising in a phased manner and facilitate issuers to plan and execute fund-raising activities. In 2021, the minimum public shareholding rules were introduced. Under these provisions, issuers with a post issue market cap above ₹1 lakh crore are required to dilute at least 5% at the time of the IPO and are mandated to increase their public shareholding to 10% within 2 years and further to 25% within 5 years from date of listing. "For very large market cap will reduce requirements to seek ad hoc or one time Sebi relaxations. This move will further ease the pressure on secondary capital markets, where only issuers with genuine capital requirements will tap into for a fund raise," said Arka Mookerjee, partner, JSA Advocates & Solicitors.
Mint
11-06-2025
- Business
- Mint
New rule lets brokers expand beyond stocks and derivatives
Mumbai: New-age investors will now be able to buy insurance or get credit of all kinds, apart from just trading in stocks and derivatives, from stock-market intermediaries such as brokers. The ministry of finance has amended certain provisions of the Securities Contracts (Regulation) Rule, allowing brokers to invest their own surplus funds in businesses apart from capital market-related activity, which was barred earlier. For instance, in real estate or non-banking finance companies, so long as there is no liability on the broker making such investments. The changes were highlighted by a National Stock Exchange (NSE) circular on Tuesday. It will let new-age investors tap brokers as a one-stop shop for all needs, while increasing the ease of doing business for market intermediaries. Dinesh Thakkar, chairman & managing director at Angel One, the third largest retail broking house in the country after Groww and Zerodha, summed up the significance of the amendment: offering multiple services on an integrated platform. Also read | NSE gets Sebi nod to launch electricity derivatives 'With the finance ministry's clarification, brokers can now deploy surplus capital into businesses beyond broking—so long as client assets remain untouched and no personal liability is assumed," he said. "This enables us to go beyond distribution—into manufacturing products that may not be Sebi-regulated but are essential to completing a customer's financial journey: all forms of credit, insurance, and more," Thakkar said. 'The digitally savvy Indian customer is no longer looking for piecemeal solutions; they expect a complete financial experience, offered seamlessly on an integrated platform. This is our opportunity to build exactly that." The amendments to provisions of Rule 8 of the SCRR 1957 clarify that investments made by brokers will not be construed as "business" if they don't involve client funds or securities or relate to arrangements that create a financial liability for the broker. 'Business' implies that brokers have either used their client funds or securities for such investments or that the investment would impose a personal liability on the broker beyond the shareholding in a firm. To be sure, these rules are meant to ring-fence client funds and prevent brokers from taking on liabilities which could impact the broking business, creating systemic risks. Recalibration of regulatory perimeter Given the changing nature of financial services wherein new-age investors prefer platforms that offer a full range of financial services, the amendments are a "recalibration" of the "regulatory perimeter" for brokers, said Sandeep Parekh, founder of Finsec Law Advisors. "The new rule issued by the ministry of finance both clarifies and expands the scope of what a broker can do outside of broking," Parekh said. 'Given the increasingly integrated bouquet of services global brokers provide, it was time that the overly strict interpretation by Sebi and NSE was diluted so that more services could be provided by brokers without jeopardising client interest." Prior to the amendments by the department of economic affairs (DEA), these rules stated that a broker can only act as an agent, and not a principal, in the securities and commodities derivatives business; and he should not serve either as a principal or employee of any business apart from the aforesaid businesses, where he acts only as an agent. Also read | Retail investors want a piece of NSE. But no one is selling A principal refers to an owner or a person having substantial ownership within a firm. An agent is a person authorised to act on behalf of another individual or firm. NSE's clarificatory circular on 7 January 2022 stated, "...Members are not permitted to engage in any business or activities or transactions, directly or indirectly, other than that of securities or commodity derivative, except as a broker or agent not involving any personal financial liability." The circular also barred brokers from investing in businesses such as NBFC and real estate, among others, which were not incidental to or consequential upon the securities or commodity derivatives business. Kotak Securities, a subsidiary of the Kotak Mahindra Bank, had petitioned the Bombay High Court against the circular, which necessitated divesting its stake in a non-banking financial services company. It had invested 49% in car financier Kotak Mahindra Prime, also a subsidiary of its parent bank, well before NSE's clarificatory circular. The outcome of the case is awaited. A Kotak Securities official declined to comment as the matter was "sub juidce", while queries emailed to NSE remained unanswered until press time. Also read | Nifty 50 reclaims 25,000, next hurdle at 25,300
Time of India
19-05-2025
- Business
- Time of India
Brokers can now set up arms, invest in new business
M UMBAI: The govt on Monday amended the Securities Contracts (Regulation) Rule, which will now allow brokers to use their own funds to invest in businesses outside their own area. However, they will not be allowed to use clients' funds to invest in those businesses. They will also not be allowed to borrow funds to invest in other businesses. Brokers said they will now wait for Sebi's rules on the same. Till now, brokers were not allowed to float subsidiaries. The changed rules will allow that, top officials at broking houses said. "Given the growth in the scale and interconnectedness of the financial sector and the evolution of the nature of business of brokers with time, the DEA (Dept of Economic Affairs) felt it necessary to review the appropriateness of safeguards embedded in the rules so that the intent of the rules is served without constraining activities of the stakeholders," the govt said through a release on Monday. Broking house officials feel this amendment to SCRR is an important shift in regulatory approach. Till now, stock brokers were not allowed to make investments in any business other than securities and commodity derivatives, said leading broker Motilal Oswal. "This amendment would now allow stock brokers to make investments in any type of business, provided it is not out of client funds or client securities and also it should not create financial liability on the broker. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 수천시간을 투자해서 만든 이미지영어 40분 특강 스티븐영어 지금 시작하기 Undo " This change also opens avenues for brokers to make strategic investments. "Stockbrokers have always been allowed to use their own funds for day-to-day operations within the securities and commodities business. This change potentially allows for strategic investments outside these core areas, offering greater capital flexibility," said Pranav Haridasan, MD and CEO, Axis Securities. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
