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 Securities and Exchange Board of India said in a statement after the board meeting.
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 per cent 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.
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.