Market regulator SEBI eased the Minimum Public Offer (MPO) requirements for large issuers on Wednesday, making a way for the smooth launch of looming large initial public offerings such as the Life Insurance Corporation (LIC).

The SEBI Board decided to recommend changes to the securities contracts regulation rules for issuers with a post-issue market capitalization exceeding ₹1,00,000 crore. The requirement of MPO for such issuers will be reduced from 10% of post-issue market capitalization to ₹10,000 crores plus 5% of the incremental amount beyond ₹1,00,000 crore. SEBI Chairman Ajay Tyagi told that these issuers shall be required to achieve at least 10% public shareholding in two years and at least 25% public shareholding within five years from the date of listing. He told that the relaxation which they are bringing up to the minimum public offer will aid large IPO issuers when asked if this move was intended to facilitate the upcoming IPO of the LIC, which is a giant in the insurance industry.

Currently, the Securities Contracts (Regulation) Rules, 1957 (SCRR) specifies that the issuers having a post-issue market capitalization of a minimum of ₹4,000 crores or more, must offer to the public at least 10% of their post-issue market capitalization. Moreover, such issuers are also required to achieve a minimum public shareholding (MPS) of at least 25% within three years from the date of listing.