SEBI extends anchor investors' lock-in period in IPO to 90 days from 1 month

The Securities and Exchange Board of India (SEBI) on Tuesday introduced a slew of measures to further reform the Initial Public Offering (IPO) market in the country.

The lock-in period for anchor investors for 50 per cent portion has been increased to 90 days from 30 days. The lock-in period for the other 50 per cent portion will continue to remain 30 days.

"The existing lock-in of 30 days shall continue for 50 per cent of the portion allocated to anchor investor and for the remaining portion, lock-in of 90 days from the date of allotment shall be applicable for all issues opening on or after April 1, 2022," SEBI said in a statement.

For promoters, the lock-in requirement for allotment up to 20 per cent of the post issue paid-up capital shall be reduced to 18 months from the existing 3 years. The lock-in requirement for allotment exceeding 20 per cent of the post-issue paid-up capital shall be reduced to 6 months from the existing 1 year.

For non-promoters, the lock-in requirement for allotments shall be reduced from a requirement of 1 year to 6 months.

In case of book built issues, a minimum price band of at least 105 per cent of the floor price shall be applicable for all issues opening on or after notification in the official gazette.

The decision was taken in a SEBI Board meeting held in Mumbai on Tuesday under the chairmanship of SEBI chairman Ajay Tyagi.

The Board approved the proposal to amend various aspects of the regulatory framework under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations) and consequential amendment to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as applicable, based on the public consultation process on the proposals recommended by Primary Market Advisory Committee (PMAC).

The SEBI Board decided to amend conditions for the offer for sale (OFS) to the public in an IPO where Draft Red Herring Prospectus (DRHP) is filed by the issuer without a track record. As per the revised law, the shares offered for sale by selling shareholders, individually or with persons acting in concert, holding more than 20 per cent of the pre-issue shareholding of the issuer, shall not exceed more than 50 per cent of their pre-issue shareholding.

Shares offered for sale by selling shareholders, individually or with persons acting in concert, holding less than 20 per cent of the pre-issue shareholding of the issuer, shall not exceed more than 10 per cent of the pre-issue shareholding of the issuer.

( With inputs from ANI )

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