Sebi reduces lockdown period for promoters to 18 months after IPO
Markets regulator Sebi has reduced the minimum blocking period for promoters’ investment after an initial public offering (IPO) to 18 months from three years, under certain conditions.
The move comes at a time when many companies are looking to list on stock exchanges.
In addition, the Securities and Exchange Board of India (Sebi) has simplified the disclosure requirements of group companies.
In a notice, Sebi said that if the subject of the issue involves an offer for sale or financing other than for capital expenditures for a project, then the promoters’ minimum contribution of 20 percent would remain fixed for 18 months from of the date. award at the IPO.
Currently, the lockdown period is three years.
Capital expenditures include civil works, miscellaneous fixed assets, purchase of land, buildings and plant and machinery, among others.
Additionally, the lock-in period for promoter participation in excess of the 20 percent minimum has also been reduced from the current year to six months.
The regulator has also reduced the minimum lockdown on pre-IPO securities held by people other than promoters to six months from the award date. There is currently a one-year blackout period.
Apart from this, the regulator has lowered the disclosure requirements at the time of the IPO.
The disclosure requirements in the offering documents, with respect to the group companies of the issuing company, have been streamlined to exclude the disclosure of financial information of the top 5 listed or unlisted group companies.
These disclosures will continue to be available on the website of the group companies.
“In case an issuer is not a government company, legal authority or corporation or any special purpose vehicle established by any of them, the names and registered office address of all group companies will be disclosed in the document of offer, “said Sebi. in a notice dated August 13.
To give effect to this, Sebi has modified the ICDR (Equity Issuance and Disclosure Requirement) rules.
This comes after Sebi’s board approved a proposal on the matter earlier this month.