SEBI's new rules make IPO path easier for Jio, NSE
What's the story
The Securities and Exchange Board of India (SEBI) has relaxed its minimum public offer (MPO) and minimum public shareholding (MPS) norms. The move is expected to make it easier for large companies like Reliance Jio and the National Stock Exchange (NSE) to go public without flooding the market. The new regulations are especially beneficial for firms with a market value over ₹5 lakh crore, which were previously required to sell at least 5% of their equity through an IPO.
Rule change
Jio's IPO to be half the previous requirement
Goldman Sachs had valued Reliance Jio at over ₹13.5 lakh crore in a bull case scenario. This would have meant the company raising over ₹58,000-67,500 crore in one go under the previous SEBI norms. However, with the new proposal halving this requirement to 2.5%, an IPO size of about ₹30,000 crore is now feasible for Jio. Reliance chair Mukesh Ambani has said that they plan to enter public markets in H1 2026 with unprecedented value for investors.
Market impact
Gradual dilution of stakes for companies
The revised framework also allows companies to meet the 25% MPS requirement over a period of up to 10 years. This gradual dilution of stakes will prevent large one-time issues from draining liquidity in the secondary market. The NSE, which is expected to list next year with a valuation of over ₹5 lakh crore, also stands to gain significantly from these reduced float requirements.
Listing consistency
New rules bring predictability to large companies' market approach
The new rules also bring consistency and predictability in how very large companies can approach the market. This is especially important given India's IPO market is preparing for a massive pipeline of ₹2.8 lakh crore. According to Primedatabase, SEBI has approved issues worth about ₹1.14 lakh crore while offers worth another ₹1.64 lakh crore are pending approval.