SEBI relaxes public shareholding norms for mega IPOs
The Indian government just made it simpler for large companies to launch mega IPOs by relaxing public shareholding rules.
Now, how much of a company needs to be owned by the public depends on its size after the IPO, so bigger firms get more flexibility.
The new norms were notified on March 13, 2026.
What are the new rules?
Instead of a one-size-fits-all rule, there's now a tiered system: if your company's post-IPO capital is up to ₹1,600 crore, you'll still need at least 25% public ownership.
If it's between ₹1,600 and ₹4,000 crore, you just need shares worth ₹400 crore held by the public.
For even bigger companies, the required percentage drops further as size increases.
Transition timelines and other requirements
Companies that start with less than 15% public holding must reach that level within five years, hit 25% within 10 years for certain very large issuers, while other size bands have shorter timelines.
If they're already above 15%, some size bands allow five years to reach 25%, while others require a shorter period (for example, three years).
There's always a minimum offer size of 2.5%, and any special voting rights shares have to be listed alongside regular shares.
Changes approved last year
SEBI gave these changes a green light back in September 2025. The rules also cover firms before they list.
Recognized stock exchanges may impose fines or penalties for past non-compliance with public shareholding norms.