Sebi gives green light to Jio Platforms IPO, six other public offers

India’s market regulator, SEBI, is contemplating expanding institutional involvement in public offerings by smaller businesses. This includes setting aside a portion of shares for professional investors before companies list on specialized platforms, according to two sources familiar with the matter. SEBI is also considering raising profitability requirements for listing on these platforms and increasing the minimum capital needed for a listing.

These potential changes come after concerns about small firms misusing funds raised via public markets and an investigation into excessive fees imposed by investment banks. They also align with similar discussions in Hong Kong. Currently, companies with paid-up capital up to ₹100 crore can list on separate sections of the BSE and National Stock Exchange of India, with fewer disclosure requirements.

Under the proposed changes, up to 50% of a small company’s share issue could be reserved for qualified institutional buyers, with 35% allocated to retail investors and 15% to non-institutional investors. Additionally, firms could be required to have reported an average profit of ₹3 crore over the past three years to list, and the post-issue capital requirement could be replaced by a market capitalization range of ₹1,000 crore to ₹4,000 crore.

An offer-for-sale framework, allowing investors to exit during the public offering, is also being considered.