Sebi reduces the minimum lock-in period for promoters after IPO

"The lock-in of promoters shareholding to the extent of minimum promoters contribution, either 20 per cent of post-issue capital shall be for a period of eighteen months from the date of allotment in an initial public offering (IPO) and public offering (FPO) instead of existing three years," the Sebi board said in a statement.

The board also reduced the lock-in of pre-IPO securities held by persons other than promoters from one year to six months from the date of allotment in IPO.

It also agreed in principle to the proposal for shifting from the concept of the promoter to ‘person in control’ or ‘controlling shareholders’ in a progressive manner.

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

In recent years, a number of businesses and new-age companies with diversified shareholding and professional management that are coming into the listed space are non-family owned and/or do not have a distinctly identifiable promoter group, it said.

In addition, there is an increasing focus on better corporate governance with responsibilities and liabilities shifting to the board of directors and management.

The board also decided to approve some measures to reduce the disclosure requirements at the time of IPO. Those measures include rationalising the definition of the promoter group; in cases where the promoter of the issuer company is a corporate body, to exclude companies having common financial investors.

Moreover, the disclosure requirements in the offer documents, in respect of group companies of the issuer company, should be rationalized too, inter-alia, exclude disclosure of financials of top five listed or unlisted group companies.

These disclosures will continue to be made available on the website of the group companies.