India lowers minimum public share float, paving way for NSE, Jio listing

India has reduced the proportion of shares that large companies must sell when listing on stock exchanges, paving the way for initial public offerings by the National Stock Exchange and Reliance Jio.

The regulator last year proposed to halve the minimum amount of shares that large companies can offer in their IPOs, from Rs. 5 lakh crore ($57 billion) were allowed to sell only 2.5% of their paid-up capital. Now this has been implemented and formally notified by the government. The changes were part of the rules announced late on Friday.

The details of the changes are as follows:

* A minimum of 2.5% of each class of equity shares may be offered to the public.

* A mandatory glide path has been put in place to reach 25% public shareholding. Companies with less than 15% public shareholding at the time of listing will have 5 years to reach 15% and 10 years to reach 25%.

* If the public float at the time of listing is more than 15%, the company will have 5 years to reach 25%.

* Rs. 1 lakh crore to Rs. For companies with a market capitalization of Rs 5 lakh crore, the minimum public float will be set at 2.75%.

* Rs. 50,000 crore and Rs. For companies with a market capitalization of Rs 1 lakh crore, the minimum public float is set at 8%.

* Other provisions include a stipulation that if a company having equity shares of a class with superior voting rights is listing ordinary shares, it must mandatorily list the shares with superior voting rights.