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Informist, Saturday, Mar. 14, 2026

 

MUMBAI – The government has amended the rules governing minimum public offer and allotment requirements for companies seeking to list on stock exchanges, by introducing a framework linked to the company's post-issue capital, according to a notification issued by the Ministry of Finance Friday. The ministry has amended Rule 19 of the Securities Contracts (Regulation) Rules, 1957, under which specific minimum public offer percentages are established based on the company's post-issue capital calculated at the offer price. 

 

According to the revised framework, for a company with post-issue capital of up to INR 16 billion, at least 25% 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 INR 16 billion but less than INR 40 billion, the company must offer shares equivalent to INR 4 billion, according to the notification.

 

Similarly, for companies with post-issue capital of above INR 40 billion but less than or equal to INR 500 billion, the public offer must be at least 10% of each class of equity shares or convertible debentures issued by the company. Companies with post-issue capital of more than INR 16 billion and below INR 500 billion must increase their public shareholding to at least 25% within three years from the day of listing in the manner specified by the Securities and Exchange Board of India. 

 

Companies with post-issue capital of above INR 500 billion but less than or equal to INR 1 trillion must offer shares equivalent to INR 10 billion and at least 8% of each class of shares or convertible debentures issued by the company to the public. These companies must increase their public shareholding to at least 25% within five years of listing. 

 

For companies with post-issue capital between INR 1 trillion and INR 5 trillion, the minimum public offer should be shares equivalent to at least INR 62.50 billion and at least 2.75% of each class of shares or convertible debentures issued. Companies with post-issue capital above INR 5 trillion must offer shares equivalent to at least INR 15 billion and at least 1% of each class of shares or convertible debentures issued by the company. Provided that the public shareholding is less than 15% at the time of listing, these companies must increase it to at least 15% within five years of listing and to at least 25% within 10 years from the listing date. If public shareholding is 15% or more at the time of listing, the company must increase its public shareholding to 25% within five years of listing.

 

The amended rules further state that at least 2.5% of each class of securities must be offered to the public, for companies not withstanding the largest post-issue threshold. 

 

The timelines to achieve the prescribed public shareholding will be available to companies that were listed on or before the commencement of the amendment rules, according to the notification. Additionally, companies that have issued equity shares with superior voting rights to promoters or founders and are seeking to list ordinary shares must list those shares with superior voting rights on the same recognised stock exchange alongside the ordinary shares being offered to the public. The revised rule also allows recognised stock exchanges to impose penalties on companies for non-compliance with public shareholding norms committed before the amendment rules came into force. 

 

These revised rules might make way for the initial public offering of Jio Platforms, the digital and telecommunications subsidiary of Reliance Industries Ltd. The public offer was being delayed as the parent company was waiting for the government to notify the new listing rules, according to several media reports.  End

 

Reported by Arya S. Biju

Edited by Avishek Dutta

 

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