SEBI Proposes Overhaul Of IPO Allocation Norms To Boost Retail Participation
The Securities and Exchange Board of India has also introduced changes to anchor investor norms in larger issues.
The Securities and Exchange Board of India has proposed a revamp of the share-allocation framework for initial public offerings, aiming to ensure higher participation and transparency in large public issues.
Under the proposed rules, for IPOs below Rs 5,000 crore, at least 35% of the offer must be reserved for retail investors. For larger IPOs, retail investors would continue to get 35% of the first Rs 5,000 crore, while 10% of the portion exceeding Rs 5,000 crore must also be allocated to them. However, SEBI has clarified that retail participation in any IPO cannot fall below 25% of the total issue.
SEBI has also introduced changes to anchor investor norms in larger issues. For IPOs above Rs 250 crore, there must be a minimum of five and a maximum of 15 anchor investors for the first Rs 250 crore. For every additional Rs 250 crore, 10 more anchor investors may be added. Each anchor investor must receive a minimum allotment of Rs 5 crore.
In a move to deepen institutional participation, SEBI has proposed that mutual funds receive at least 15% of the qualified-institutional-buyer portion, up from the current 5%.
SEBI has also suggested that any under-subscribed portion in retail or non-institutional categories may be redistributed to other investor classes.