SEBI Board Reforms: IPO, FPI, REIT and Mutual Funds
Why in the news
SEBI, headed by Tuhin Kanta Pandey, cleared a package touching IPO rules, FPIs, REITs and mutual funds to deepen capital markets and ease compliance.
Key facts
- Large issuers (market cap ₹1 trillion to ₹5 trillion): Minimum Public Offer of ₹6,250 crore plus 2.75% of post-issue market cap.
- If public holding is under 15% at listing: 5 years to reach 15% and 10 years to reach the 25% MPS. Issues below ₹50,000 crore are unchanged.
- Exit load: maximum cut from 5% to 3%; distributor incentives return for B-30 city inflows.
| Area | Change |
|---|---|
| Anchor investors | Quota 33.33% to 40%; one-third mutual funds, rest insurers and pension funds; more allottees above ₹250 crore |
| FPIs | SWAGAT-FI window for low-risk FPIs (sovereign wealth funds, government-related investors); likely to cover 70%+ of FPIs; less paperwork; $2,500 KYC fee for a 10-year block; NRIs and OCIs exempt from the 50% contribution cap |
| REITs and InvITs | Equity for mutual funds, so index-eligible; strategic investors widened to PFs, public financial institutions, AIFs, state industrial development corporations |
| Related party transactions | Turnover-based thresholds define material RPTs |
About the terms
- Anchor investor: an institution that bids just before an IPO opens, boosting listing prospects.
- RPT: dealings between a company and linked parties, such as a subsidiary or a director’s family.
Exam angle
- New FPI window: SWAGAT-FI; SEBI chief: Tuhin Kanta Pandey.
- Remember: 40% anchor quota, 3% exit load.