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Informist, Tuesday, Apr. 7, 2026

 

--SEBI grants one-time waiver to cos to meet minimum public shareholding norm

--SEBI eases minimum public shareholding norms for cos due to comply Apr-Sept

--SEBI extends observations letters validity for public issues till Sept 30

 

MUMBAI – The Securities and Exchange Board of India Tuesday relaxed norms for public issues and minimum public shareholding through two separate circulars in view of increased volatility in the capital markets following the outbreak of hostilities in West Asia. The rules have been eased with immediate effect.

 

In the first instance, SEBI has extended till Sept. 30 the validity of all its observation letters for public issues expiring any time between April and September. As per the regulator's rules, a public issue has to open for subscription within 12 months of the date of issuance of an observation letter, 18 months in case an updated draft red herring prospectus is filed within 16 months of the letter.

 

The move comes as a relief for issuers who had been facing difficulties in mobilising resources and accessing the capital markets amid the turmoil triggered by the military conflict in West Asia. Several issuers have had to defer, recalibrate, or withdraw their issuance plans, leading to potential lapse of their observation letters and duplication of the regulatory processes, SEBI said.

 

In the second instance, the markets regulator has granted a one-time exemption from penalties for listed entities that were expected to comply with minimum public shareholding norms in Apr-Sept. Consequently, stock exchanges and depositories have been told not to take penal action against companies that fail to comply with the norms until September. Further, any penalties levied from Apr. 1 till date may also be withdrawn, SEBI said. Listed companies are required to maintain minimum public shareholding of 25% as per SEBI's regulations.  End

 

Reported by Gopika Balasubramanium 

Edited by Rajeev Pai

 

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