SEBI relaxes lock-in norms for promoter shareholding

Mumbai, August 6

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.

The watchdog has also decided to streamline the disclosure requirement of group companies, the SEBI said after the Board meeting.

New Guidelines

• If the object of the issue involves an offer for sale, then the minimum promoters’ contribution of 20% should be locked in for 18 months from the date of allotment in the IPO and follow on public offer. Currently, the lock-in period is three years
• Further, in all these cases, the promoter shareholding above the minimum promoter contribution will be locked in for six months, instead of existing one year

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 FPO. Currently, the lock-in period is three years.

The entire pre-issue capital held by persons other than the promoters should be locked in for six months from the date of allotment in the IPO as against the current requirement of one year. — PTI