Last Updated:
SEBI proposes easing IPO rules for large firms, extends public shareholding timeline, partners with Meta to verify ads, and tightens controls on mutual funds
SEBI has partnered with Meta to verify financial ads.
The Securities and Exchange Board of India (SEBI) has unveiled a series of reform proposals aimed at making it easier for large companies to tap the equity markets while simultaneously strengthening the safety net for retail investors.
Speaking at an industry forum, SEBI full-time director Kamlesh Chandra Varshney said that the regulator has floated a consultation paper seeking public feedback on key measures. Among the most significant proposals is an extension of the timeline for very large listed firms to meet the minimum public shareholding requirement.
“At present, companies have to fulfill this requirement within 5 years of listing, that is, they have to give their 25 percent stake to public investors,” Varshney explained, “The regulator has proposed that for extremely large companies, this period could be extended to 10 years.”
The move is expected to clear the way for mega-IPOs such as that of the National Stock Exchange, which have often faced hurdles due to stringent shareholding timelines. SEBI’s stated objective is to expand the depth of the market, create more investment avenues, and allow corporate giants a smoother entry into the bourses.
Crackdown On Inflated IPO Pricing
Varshney also underlined the regulator’s growing concern about unrealistic IPO valuations. He noted that SEBI has asked merchant bankers and anchor investors to adopt more reasonable pricing models to prevent steep falls in stock values after listing. “Such a fall can reduce the confidence of retail investors,” he cautioned, adding that volatility erodes market credibility.
Action Against Unregistered Advisors
The regulator is simultaneously intensifying its scrutiny of unregistered investment advisors and social media influencers who mislead small investors with stock tips and market predictions. SEBI has observed a rise in dubious online promotions targeting retail traders, prompting a more proactive monitoring approach.
Partnership With Meta To Filter Ads
In an effort to curb misleading financial content online, SEBI has partnered with Meta, the parent company of Facebook, to roll out an advertisement verification system. “The regulator has partnered with Meta for the advertisement verification process, to ensure that only registered entities promote market-related content,” Varshney said. He confirmed that discussions are underway with other social platforms to establish similar checks, particularly to counter misleading stock reels and fake promotional campaigns.
Strengthening Mutual Fund Safeguards
Beyond IPO reforms, SEBI is also focusing on investor protection in the mutual fund space. Varshney said the regulator has directed all asset management companies to tighten controls against fraudulent redemptions. “Many such cases have come to light where investors have withdrawn money of other investors fraudulently,” he noted, stressing that stricter compliance mechanisms are being designed to safeguard investors’ capital.
Read More
