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Informist, Wednesday, Jun. 18, 2025

NEW DELHI – The Securities and Exchange Board of India has decided to extend the exemption from the requirement of a minimum holding period of one year pursuant to an offer for sale in initial public offers to equity shares arising out of the conversion of compulsorily convertible securities under the regulations for capital issue and disclosure. SEBI's board cleared the proposal at its meeting Wednesday, the markets regulator said in a press release.

This exemption will allow investors holding convertible securities to participate in the offer for sale in initial public offers, according to SEBI. It will also "assist public companies ... intending to list after undertaking reverse flipping (shifting the country of incorporation from a foreign jurisdiction to India)", the regulator said. Additionally, SEBI has relaxed certain requirements relating to share-based benefits granted to founders prior to a company coming out with its initial public offer.

SEBI's board also approved a proposal to mandate dematerialisation of existing securities of select shareholders such as the promoter group, selling shareholders, and key managerial personnel, prior to filing of a draft prospectus for an initial public offering. In another move cleared by the board, SEBI can now proceed to mandate issuance of securities by listed companies only in dematerialised form in the case of corporate actions such as consolidation or split of face value of securities and schemes of arrangement. This means companies will be barred from creation of physical securities in such cases.  End

Reported by Rajesh Gajra

Edited by Rajeev Pai

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