sebi: SEBI relaxes blocking period rules for promoters, pre-IPO investors of IPO companies
The market regulator has said that the lock-up period for the promoter’s stake in an IPO company will be reduced to 18 months from the date the IPO shares are awarded instead of the current three years, albeit under certain conditions.
The easing will be offered in the event that the IPO is entirely an offer for sale by existing investors, where fresh funds are raised for purposes other than investment spending and where the new issue and the OFS offers are intended to finance a project other than Capex.
“In addition, in all of the aforementioned cases, the promoter’s participation beyond the promoter’s minimum contribution will be blocked for a period of six months instead of existing for one year,” SEBI said.
The capital market regulator has also eased the lock-in period for investors buying the company’s shares on a pre-IPO issue to six months from the current one.
The holding period of venture capital shares for a venture capital fund or an alternative investment fund of category I or category II or a foreign investor in venture capital is reduced to 6 months from the date of their acquisition of these shares instead of the existing 1 year, SEBI mentioned.
SEBI also approved certain measures to reduce disclosure requirements at the time of the company’s IPO. SEBI said the definition of promoter group will be streamlined, in case the promoter of the issuing company is a legal person, to exclude companies with common financial investors.
In addition, the disclosure requirements in the IPO offering documents regarding the group companies of the issuing company should be streamlined to exclude the disclosure of financial data of the top 5 listed or unlisted group companies, said SEBI.