Finance Ministry Amends IPO Rules: Introduces Tiered Framework for Minimum Public Offers
Union finance ministry has amended rules for minimum public offers floated by companies for getting listed on stock exchanges, introducing a tiered framework linked to a company’s post-issue capital.
New Delhi: The Union finance ministry has amended rules for minimum public offers floated by companies for getting listed on stock exchanges, introducing a tiered framework linked to a company’s post-issue capital. In a notification on Saturday, the ministry amended Rule 19 of the Securities Contracts (Regulation) Rules, 1957 through the Securities Contracts (Regulation) Amendment Rules, 2026.
The changes came into force from the date of publication in the official gazette. Under the revised framework notified by the government, the minimum offer and allotment to the public will vary depending on the company’s post-issue capital calculated at the offer price.
As per the new rules, companies with post-issue capital of more than Rs 1,600 crore and below Rs 5,000 crore will have to increase their public shareholding to at least 25 percent within three years from the day of listing in the manner specified by the market regulator Securities and Exchange Board of India (Sebi).
The rules further state that at least 2.5 percent of each class of securities must be offered to the public at the time of listing, irrespective of the post-issue threshold. “A company with post-issue capital of up to Rs 1,600 crore, at least 25 percent of each class of equity shares or debentures convertible into equity shares issued by the company must be offered to the public. If the post-issue capital is more than Rs 1,600 crore, but less than Rs 4,000 crore, the company will have to offer shares equivalent to Rs 4,000 crore,” the notification said.
It further noted that for companies with post-issue capital of above Rs 4,000 crore, but less than or equal to Rs 5,000 crore, the public offer must be at least 10 crore of each class of equity shares or convertible debentures issued by the company. “Companies with post-issue capital of above Rs 5,000 crore, but less than or equal to Rs 1 lakh crore, must offer shares equivalent to Rs 1,000 crore and at least 8 percent of each class of shares or convertible debentures issued by the company to the public,” it said.
These companies must increase their public shareholding to at least 25 per cent within five years of listing, the Securities Contracts (Regulation) Act or SCRA rules said. “For companies with post-issue capital between Rs 1 lakh crore and Rs 5 lakh crore, the minimum public offer should be shares equivalent to at least Rs 6,250 crore and at least 2.75 percent of each class of shares or convertible debentures issued,” it said.
It also said the companies with post-issue capital above Rs 5 lakh crore must offer shares equivalent to at least Rs 1,500 crore and at least 1 percent of each class of shares or convertible debentures issued by them. Provided that the public shareholding is less than 15 per cent at the time of listing, these companies must increase it to at least 15 per cent within 5 years of listing and to at least 25 per cent within 10 years from the listing date. If public shareholding is 15 per cent or more at the time of listing, the company must increase its public shareholding to 25 per cent within 5 years of listing.
