Changes in public shareholding rules of IPO: Minimum limit reduced from 5% to 2.5%; Jio and NSE listing will be easy

The Department of Economic Affairs (DEA) under the Finance Ministry on Friday made changes in the rules related to Initial Public Offering i.e. IPO in the country.

By making changes in the Securities Contracts (Regulation) Rules-1957, the government has reduced the minimum public shareholding limit for big companies from 5% to 2.5%.

After this notification issued on March 13, it will now become easier for big companies like Reliance’s Jio Platforms and National Stock Exchange (NSE) to launch their IPO.

SEBI had approved these changes in September last year, which have now been given final approval by the government.

How much share will be required to be sold will be decided based on the value of the company

According to the new rules, companies have been divided into different categories based on their post-listing value. A tier structure has been prepared for this…

Companies up to ₹1,600 crore: Such companies will have to issue at least 25% shares to the public.

₹1,600 crore to ₹4,000 crore: Such companies will have to offer shares worth at least ₹400 crore.

₹4,000 crore to ₹50,000 crore: Such companies will have to issue at least 10% shares. However, they will have to increase their public shareholding to 25% within 3 years of listing.

₹50,000 crore to ₹1 lakh crore: Companies with this valuation will have to offer at least ₹1,000 crore or 8% shares. They will also have to take public shareholding to 25% in 3 years.

Big companies got relief from ₹5 lakh crore

According to the notification, the rules have been simplified for very big companies…

From ₹1 lakh crore to ₹5 lakh crore: These companies will have to make at least 2.75% shares public at the time of listing.

Value more than ₹5 lakh crore: If the value of a company is above ₹5 lakh crore, then it can get listed even by selling just 1% stake.

Such companies have been given the freedom to increase their public shareholding to 15% within 5 years and 25% within 10 years.

Jio Platforms will bring India’s biggest IPO

According to media reports and Bloomberg reports, Reliance Industries will be the biggest beneficiary of this change in rules. Mukesh Ambani-led group company Jio Platforms is preparing to launch it in the stock market.

This will be the first listing of a Reliance unit after almost 20 years. It is believed that Jio’s IPO can prove to be the biggest IPO in the history of India. Sources reveal that the company may file the draft prospectus (DRHP) by April.

This step of the government will open the way for listing of big companies.

After the boom in the IPO market in the year 2025, the market was looking a bit sluggish at present. Experts say that this step of the government will open the way for listing of big companies, which will increase liquidity in the market and investors will get new investment opportunities. NSE which has been waiting for its listing for a long time will also get relief from these new rules.

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