Sebi board agrees in principle to 'controlling shareholders' concept
Sebi has also decided to streamline the disclosure requirement of group companies
Markets regulator Sebi on Friday agreed “in-principle” to a proposal to move from the concept of the promoter to “controlling shareholders”, and decided to reduce the minimum lock-in period for promoters post an IPO.
Sebi has also decided to streamline the disclosure requirement of group companies, it said in a statement.
About the lock-in period, Sebi said, if the object of the issue involves an offer for sale or financing other than for capital expenditure for a project, then the minimum promoters’ contribution of 20% should be locked in for 18 months from the date of allotment in the initial public offer (IPO) and follow on public offer (FPO). Currently, the lock-in period is three years.
In all these cases, the promoter shareholding above the minimum promoter contribution will be locked in for six months, instead of existing one year.
Promoters’ holding in excess of minimum promoters’ contribution will be locked in for six months as opposed to the existing requirement of one year from the date of allotment in the IPO, Sebi said.
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 Sebi board noted that the investor landscape is now 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,” the board said.