SEBI Announces Sweeping Reforms to Boost Capital Market Growth

Strategic Insights -

The Securities and Exchange Board of India (SEBI) has announced a set of sweeping reforms aimed at bringing more wealth into capital markets. The reforms include easing rules on minimum public shareholding norms, promoting foreign investments, improving IPO allocation frameworks, classifying REITs and InVITs as equity instruments, and easing compliance norms for market infrastructure institutions.

Key Takeaways:

  • SEBI has eased IPO rules for very large firms by extending the timeline to meet minimum public shareholding requirements up to 10 years.
  • The minimum public offer size for organizations with a market-cap of over Rs 5 lakh crores has been set at 1% or Rs 15,000 crores.
  • The SEBI has also announced a new website, indiamarketaccess.in, to provide single window access to FPIs and boost inflows.
  • The share-allocation framework for anchor investors in IPOs has been revamped to broaden institutional investors' participation.
  • The reserved limit for anchor portion in IPO has been increased to 40% from one-third of the IPO size.
  • Life Insurance companies and Pension Funds will be included in the reserved category as part of the IPO anchor book.
  • REITs and InVITs have been classified as equity instruments.
  • Mutual Fund distributors will receive more commission for first-time women investors to empower women.
  • Norms have been relaxed regarding CIBIL reports and Net Worth requirements.
  • Market Infrastructure Institutions (MIIs) will have to prioritize critical operations, regulatory, compliance, risk management, and investor grievances over commercial interest.

Statistics:

  • 10-year timeline extension for meeting minimum public shareholding requirements.
  • Rs 5 lakh crores market-cap threshold for minimum public offer size of 1% or Rs 15,000 crores.
  • 40% reserved limit for anchor portion in IPO to be increased from one-third of the IPO size.

Sources:

  • "SEBI Announces Sweeping Reforms to Boost Capital Market Growth" by FPJ Web Desk, SEBI, and Contify.com.
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