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SEBI Eases Rules Regarding Non-Promoter ShareHolders, For Companies Going For IPO

Non-promoter shareholders can now help meet the minimum promoters' contribution for IPO-bound companies

SEBI has changed its rules to make it easier for companies planning to go public. Non-promoter shareholders can now help meet the minimum promoters’ contribution for IPO-bound companies without being classified as promoters themselves. 

This is a relief for new-age technology companies whose founders have diluted much of their stake in previous funding rounds. 

The amendment allows non-promoter shareholders, excluding individuals holding more than 5% of the post-offer equity share capital, to contribute towards the shortfall. 

However, promoters still need to hold at least 10% post-issue. 

Additionally, SEBI now allows companies to extend the IPO period by just one day in case of unforeseen events and has introduced greater flexibility for adjusting the issue size after the offer document submission.

These changes were proposed by an expert committee led by a former full-time member of SEBI back in January.

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