Overview

• SEBI’s draft, released August 18, responds to concerns that large IPOs can overwhelm market demand by allowing mega-cap companies to sell smaller initial stakes and stagger compliance with the 25% public holding rule.
• Size-based floors require ₹50,000–₹100,000 crore firms to offer ₹1,000 crore or 8% equity, ₹100,000–₹500,000 crore firms to offer ₹6,250 crore or 2.75%, and issuers above ₹500,000 crore to issue ₹15,000 crore or 1% with at least 2.5% dilution.
• Issuers will have five years to meet the 25% minimum public shareholding threshold, with an extension to ten years if their IPO float is below 15% at listing.
• The regulator has kept the 35% retail quota intact and clarified that penalties for past minimum public shareholding breaches will remain in force.
• The consultation paper is open for comments until September 8, 2025, after which SEBI will review stakeholder feedback before finalizing the reforms.