• Source:JND
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The central government has revised the initial public offering rules for large firms amid the companies rushing to list themselves on the share market. Under the revised rules, the large firms will have to offer a small portion of the company shares to the common people during the Initial Public Offering process.

Making amendments in Rule 19 of the Securities Contracts (Regulation) Rules, 1957, through the Securities Contracts (Regulation) Amendment Rules, 2026, the Ministry of Finance issued a notification on March 13 that new regulations will be implemented from the date of publication of the official gazette.

The new framework says that the minimum offer and allotment to the public will vary with respect to the company’s post-issue capital calculated at the offer price.

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How Will New Regulation Affect Large Firms

  • Companies with post-issue capital of up to Rs 1,600 cr will have to offer at least 25 per cent of each class of equity shares or debentures convertible into equity shares to the public.
  • In case of post-issue capital ranging between Rs 1,600 cr and 4,000 cr, companies will have to offer shares equivalent to at least Rs 400 crore to the public.
  • Companies with post-issue capital between Rs 4,000 and Rs 5,000 crore will have to offer a minimum of 10 per cent of each class of equity shares or convertible debentures to the public. These companies must increase companies must raise their public shareholding to at least 25 per cent within three years of listing. The procedure should follow the manner specified by the Securities and Exchange Board of India.
  • The public offering rule changes with the size of post-issue capital. For companies with post-issue capital above Rs 50,000 crore and up to Rs 1 lakh crore, the rules require a public offer equivalent to at least Rs 1,000 crore and not less than 8 per cent of each class of shares or convertible debentures. These companies must increase public shareholding to at least 25 per cent within five years of listing.
  • With the increase in post-issue capital, the minimum percentage of shares to be offered to the public. Companies with post-issue capital above Rs 1 lakh crore and up to Rs 5 lakh crore must offer shares equivalent to at least Rs 6,250 crore and not less than 2.75 per cent of each class of securities to the public.
  • Companies with post-issue capital of more than Rs 5 lakh crore will have to match the public offer equivalent to at least Rs 15,000 crore and at least 1 per cent of each class of equity shares or convertible debentures.

The notification also specifies timelines for companies in the largest capital brackets to increase public shareholding after listing. The revised rules make it mandatory to offer at least 2.5 per cent of each class of securities to the public, despite the provisions applicable to the largest companies.

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The notification also gives the right to recognised stock exchanges to impose penalties on companies for non-compliance with public shareholding norms committed before the amendment rules came into force.


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