The government has amended the rules to ease the listing process of companies with large market caps. This will make the identity of many Indian companies.
Listing process made easy for companies
The government has simplified the rules so that companies do not face any problem at the time of listing. Now companies with a market cap of more than one lakh crore rupees will be able to list without any hindrance. Under the new rule, such companies will be able to sell five percent of their shares in the market. This decision of the government will benefit the government during the proposed IPO of Life Insurance Corporation of India (LIC).
The Department of Economic Affairs, which comes under the Ministry of Finance, has amended the Securities Contracts (Regulation) Rules and implemented new rules. Under this, units with a market cap of more than one lakh crore will have to increase the share of their public share to 10 percent in two years and at least 25 percent in five years.
In this regard, Yash Ashar, Partner and Head (Capital Markets), Cyril Amarchand Mangaldas, a legal services provider company, said in an interview that it may be challenging to offer for sale of 10 per cent shares in larger IPOs in future. He also said that companies with a market capitalization of more than Rs 1 lakh crore at the time of listing would be able to limit their IPOs to five per cent (as against 10 per cent) and this would facilitate them. Notification of Amendment in Rules 18 was released in June.
According to Yash Ashar, this change is a progressive amendment. This will identify those Indian companies which have grown from small to big. It is to be noted that in February this year, the board of SEBI had approved relaxation in minimum public offering norms for large issuers.
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