10% Ipo Norm Extended To All Corporates

The government has decided to lower the minimum listing requirement for all corporates from 25 per cent to10 per cent.

A notification to be issued by the finance ministry shortly will however specify that the company must have an offer size of 20 lakh securities with a minimum offer value of Rs 100 crore.

Information technology and other knowledge-based companies already have a minimum listing requirement at 10 per cent.

The Securities and Exchange Board of India had earlier proposed that the relaxation be offered on the condition that the minimum offer size be Rs 250 crore.

The decision of the Sebi primary market advisory committee was in line with market demands that corporates should not be forced to offload 25 per cent equity at one go.

Also, it was argued that the lower limit would allow high market capitalisation corporates to offload small amounts of equity by placing it with institutional investors.

Reacting to the proposed move, merchant bankers and brokers said the lower entry point criteria will help many corporates float IPOs with the promise that they could enhance the public shareholding once the primary markets revive.