The Securities and Exchange Board of India (SEBI) has proposed significant changes to initial public offering (IPO) rules, opening doors for mega listings by companies such as Reliance Jio Infocomm and the National Stock Exchange (NSE).
Key Changes Proposed by SEBI
- Companies with post-IPO market capitalization above Rs 50,000 crore will need to float only 8% equity, down from the current 10%.
- For companies worth more than Rs 1 lakh crore, the requirement drops to 2.75% from the current 5%.
- For firms valued above Rs 5 lakh crore, the requirement falls further to just 2.5%.
- The timeline for achieving 25% minimum public shareholding will also be extended:
- Companies above Rs 50,000 crore – 5 years instead of 3 years.
- Companies above Rs 1 lakh crore – 15% in 5 years, full 25% in 10 years.
Impact on Mega IPOs
Reliance Jio, valued at over $120 billion by Citi, could benefit massively. Under current rules, Jio would need to raise about $6 billion. With the new rules, the requirement will drop to nearly $3 billion (2.5% float).
The NSE, targeting a valuation of over $50 billion for its public debut, could also find the relaxed norms favorable. Other firms like PhonePe, preparing a $1.5 billion IPO at a $15 billion valuation, and Flipkart, exploring a domestic listing, will also likely benefit.
Other Recent Large IPOs
India has already witnessed major IPOs this year:
- Hyundai Motors India – raised Rs 27,000 crore
- Swiggy – raised Rs 11,300 crore
- NTPC Green – raised Rs 10,000 crore
SEBI’s move is aimed at boosting India’s IPO market further and encouraging global-scale listings in the domestic exchange.
