• October 23, 2021

SEBI reduces minimum lock-in period for promoters after IPO, agrees to ‘controlling shareholders’ concept

The Securities and Exchange Board of India (SEBI) on August 6 eased the lock-in period for promoters’ investments after stock market listing of the company from three years to 18 months subject to certain conditions.

The market watchdog has also decided to streamline the disclosure requirement of group companies.

SEBI approved relaxation of lock-in requirement for promoters shareholding in IPO/FPO if the object of the issue involves only offer for sale, fundraising other than for capital expenditure, for a project.

The board also agreed in principle to the proposal for shifting from the concept of the promoter to ‘person in control’ or ‘controlling shareholders’ in a smooth, progressive and holistic manner.

To this effect, it has been decided to engage with other regulators to ascertain and resolve regulatory hurdles, if any, prepare draft amendments to securities market regulations and analyse the impact of the same and further deliberate at the SEBI’s primary market advisory committee (PMAC) and develop a roadmap for implementation of the proposed transition.

The board noted that the investor landscape is now changing, with private equity and institutional investors holding significant shareholding in listed companies.

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