Royzz & Co
SEBI reduces minimum lock-in period for promoters’ investment post IPO
The Securities and Exchange Board of India (SEBI) has reduced the minimum lock-in period for promoters' investment post initial public offering (IPO) to 18 months, subject to certain conditions. The earlier period stood at 3 years. If the object of the issue involves offer-for-sale or financing other than for capital expenditure for a project, then the minimum promoters’ contribution of 20% would be locked in for 18 months from the date of allotment in the IPO. Capital expenditure is said to include civil work, miscellaneous fixed assets, purchase of land, building and plant and machinery, among others. The lock-in period for the promoter shareholding in excess of the minimum 20% has also been reduced from the existing one year to six months.
SEBI has also streamlined the disclosure requirements of group companies as well as amended the takeover regulations because of the implementation of the System Driven Disclosures (SDD). Certain disclosure obligations for the acquirers / promoters on acquisition or disposal of shares aggregating to 5 % and any change of 2 % thereafter, annual shareholding disclosures and creation or invocation or release of encumbrance registered in depository systems under takeover regulations would not be applicable. The amendment will be applicable from April 1, 2022.