The government has made changes to the regulations regarding minimum public shareholding for big corporations. The new tiered structure allows large companies to offer a smaller portion of shares to the public during their initial public offering (IPO) and gradually increase it to the mandated 25 percent level. The amendment ties the minimum public offers to a company’s post-issue capital at the IPO price.
Under the revised rules, companies with post-issue capital above Rs 1,600 crore but up to Rs 4,000 crore must offer shares worth at least Rs 400 crore to the public. For companies with post-issue capital exceeding Rs 4,000 crore but up to Rs 50,000 crore, they need to offer a minimum of 10 percent of their shares at listing and increase public shareholding to 25 percent within three years as per SEBI guidelines.
In the case of companies with post-issue capital ranging from Rs 50,000 crore to Rs 1 lakh crore, they are required to make a minimum public offer equivalent to Rs 1,000 crore and at least 8 percent of each class of shares. For companies with post-issue capital between Rs 1 lakh crore to Rs 5 lakh crore, the mandate is to offer shares worth at least Rs 6,250 crore and maintain a minimum public shareholding of 2.75 percent at listing.
Moreover, companies with post-issue capital exceeding Rs 5 lakh crore must offer shares worth at least Rs 15,000 crore and maintain a minimum public shareholding of 1 percent at the time of listing. The changes have been implemented through the Securities Contracts (Regulation) Amendment Rules, 2026, issued by the Ministry of Finance under the Securities Contracts (Regulation) Act, 1956.
Regardless of the company’s size, all firms are obligated to offer at least 2.5 percent of each class of equity or convertible securities to the public. If the public shareholding at the time of listing is below 15 percent, companies must increase it to at least 15 percent within five years and further to 25 percent within ten years of listing.
