SEBI Proposes Relaxation in Minimum Public Offer Norms

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  • Last Updated on 20 August, 2025

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SEBI Public Offer Relaxation 2025

Consultation Paper; Dated: 18.08.2025

SEBI Proposes Relaxation in Public Offer Requirements

The Securities and Exchange Board of India (SEBI) has released a consultation paper proposing relaxations in the minimum public offer requirements for very large companies. The move comes in response to challenges faced by issuers in raising large volumes of funds through Initial Public Offerings (IPOs) while meeting the existing regulatory thresholds.

Extension of Timeline for Public Shareholding Compliance

Alongside easing public offer norms, SEBI has also proposed extending the timelines for such companies to comply with minimum public shareholding (MPS) requirements. This measure is intended to provide flexibility to large issuers in gradually increasing public participation, without placing undue strain on capital markets or on the companies themselves.

Reduction in Retail Quota for Large IPOs

A significant proposal is the reduction of the retail investor quota in IPO allocations from 35% to 25% for issues exceeding ₹5,000 crores. SEBI has cited difficulties faced by issuers in efficiently managing large retail demand for such oversized IPOs. The proposed reduction aims to balance investor participation with smoother execution of large public issues.

Public Comments and Next Steps

SEBI has invited public comments on the proposals, with stakeholders required to submit their feedback by September 8, 2025. The regulator will consider these responses before finalizing amendments. If implemented, the proposals could reshape the dynamics of large IPOs, making them more manageable for issuers while still ensuring adequate retail participation and investor protection.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied