India’s securities market regulator has announced changes to initial public offering (IPO) rules, making it easier for very large private companies to go public. The Securities and Exchange Board of India (Sebi) stated that companies with a market capitalization exceeding five trillion rupees can now offer an IPO with a lower minimum public shareholding requirement. Under the new rule, these companies can dilute a 2.5% equity stake and raise a minimum of 150 billion rupees, with a gradual increase in public shareholding over the following years.
Prior to this revision, large companies planning an IPO had to dilute a minimum of 5% equity and achieve a 10% public shareholding within two years of listing. The relaxed regulations aim to facilitate listings for major private firms such as Reliance Industries’ subsidiary, Reliance Jio Infocomm, and the National Stock Exchange of India. Analysts estimate that Reliance Jio could raise over US$3 billion through its IPO under the new guidelines, signaling a significant impact on India’s capital markets.
The move is expected to boost IPO activity in India, which has emerged as one of the top destinations for first-time share sales globally. In 2025 alone, companies in the country have raised more than US$10 billion through IPOs. The regulatory adjustments also extend to global investors seeking entry into India’s stock and bond markets, with measures aimed at simplifying market access for institutional investors like sovereign wealth funds and global mutual funds.
Sebi’s decision to streamline market access for international investors reflects a broader effort to enhance India’s appeal as an investment destination and reduce regulatory hurdles. The move is anticipated to attract increased investments from institutional players, thereby enhancing liquidity in both equity and debt markets. The relaxation of rules is a response to long-standing complaints from global investors about the complexity of compliance requirements, which have hindered their participation in India’s public markets.
The amendment to IPO regulations and the facilitation of market access for foreign investors align with India’s broader economic objectives, aiming to bolster capital inflows, encourage investment, and strengthen the country’s position as an attractive destination for global investors. The changes reflect a proactive approach by Indian regulators to address market dynamics and ensure a conducive environment for businesses and investors alike.
As India continues to evolve as a prominent player in the global financial landscape, regulatory reforms such as these are crucial in fostering a vibrant and competitive capital market ecosystem. The revised rules not only cater to the needs of large private companies and global investors but also signal India’s commitment to fostering a conducive environment for capital formation and investment growth.
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