SEBI Eases IPO Rules for Large Firms, Boosting Reliance Jio and NSE Listing Prospects
SEBI has reduced the minimum public offer requirement from 5% to 2.5% for companies valued above Rs 5 lakh crore. This change benefits potential mega IPOs like Reliance Jio and NSE. Jio's IPO size could now be around Rs 30,000 crore instead of Rs 58,000-67,500 crore. Companies have up to 10 years to meet the 25% minimum public shareholding requirement. The current IPO pipeline in India stands at Rs 2,80,000 crore, with Rs 1,14,000 crore already approved and Rs 1,64,000 crore pending approval.
*this image is generated using AI for illustrative purposes only.
The Securities and Exchange Board of India (SEBI) has introduced significant changes to its Initial Public Offering (IPO) regulations, potentially reshaping the landscape for large-scale public listings in the country. These modifications are set to benefit major players like Reliance Jio and the National Stock Exchange (NSE), both of which are eyeing public debuts in the near future.
Key Changes in IPO Requirements
SEBI has relaxed the minimum public offer requirement for companies valued above Rs 5 lakh crore. The new rules reduce the mandatory public float from 5% to 2.5% of equity, a move that could substantially impact the size and structure of upcoming mega IPOs.
Impact on Reliance Jio's IPO Plans
The regulatory changes come as a significant boost for Reliance Jio, which is planning to go public in the first half of 2026, as announced by Mukesh Ambani. According to Goldman Sachs' valuation, Jio is worth over Rs 13.5 lakh crore. Under the new framework:
- Jio's potential IPO size could reduce from Rs 58,000-67,500 crore to just above Rs 30,000 crore
- This reduction may make the IPO more manageable and potentially less disruptive to market liquidity
NSE's Listing Prospects
The National Stock Exchange, expected to list next year, is another beneficiary of these new regulations. With its valuation anticipated to exceed Rs 5 lakh crore, the NSE can now plan its public offering with more flexibility under the revised rules.
Extended Timeline for Public Shareholding
In addition to reducing the initial public float requirement, SEBI has extended the timeline for meeting the 25% minimum public shareholding requirement:
- Large companies now have up to 10 years to meet this threshold
- This allows for a more gradual dilution of promoter stakes, potentially making the transition to public ownership smoother for large entities
India's Robust IPO Pipeline
The regulatory changes come amid a bustling IPO market in India:
| Category | Amount (Rs Crore) |
|---|---|
| Current IPO pipeline | 2,80,000 |
| IPOs already approved | 1,14,000 |
| IPOs pending approval | 1,64,000 |
Rationale Behind the Changes
SEBI's move appears to be aimed at preventing potential market liquidity issues that could arise from exceptionally large IPO offerings. By allowing a smaller initial public float and a longer timeline to reach the 25% threshold, the regulator seeks to balance the interests of large corporations with market stability.
These regulatory adjustments mark a significant shift in India's IPO landscape, potentially paving the way for more mega listings while safeguarding market dynamics. As companies like Reliance Jio and NSE prepare for their public debuts, the impact of these changes will be closely watched by investors and market participants alike.
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