You are here: Home » Markets » News
Business Standard

Sebi eases FPO norms; scraps minimum promoter's contribution requirement

Capital markets watchdog Sebi on Friday relaxed the framework for Follow-on Public Offers (FPOs)

SEBI | Sebi norms | Capital markets

Press Trust of India  |  New Delhi 


watchdog on Friday relaxed the framework for Follow-on Public Offers (FPOs), a move that will help pomoters of companies to raise funds more easily through this route.

The applicability of minimum promoters' contribution norm and the subsequent lock-in requirements for the issuers making FPO have been done away with by the regulator, as per a notification.

Earlier, promoters were mandated to contribute 20 per cent towards a company's FPO. Besides, in case of any issue of capital to the public, the minimum promoters' contribution was required to be locked-in for three years.

The regulator said the relaxation would be available for those companies which are frequently traded on a stock exchange for at least three years. Also, such firms should have redressed 95 per cent of investor complaints.

The issuer company needs to be in compliance with the LODR (Listing Obligations and Disclosure Requirements) Regulations for at least three years, according to

Subject to certain conditions, an issuer who has not complied with the listing requirements relating to the composition ofboard of directors for any quarter during the last three years immediately preceding the date of filing of draft offer document would be deemed as compliant.

The condition is that the issuer should be compliant with the requirement at the time of filing preliminary paper and that adequatedisclosures are made in the offer document about such non-compliances.

board had approved the proposal in December.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, January 08 2021. 20:27 IST