Indian government officially notified the Securities Contracts (Regulation) Amendment Rules, 2026. These new rules introduce a highly anticipated “tiered structure” for IPOs, effectively lowering the entry barrier for mega-corporations while ensuring they eventually reach the standard 25% minimum public shareholding (MPS).
The amendments are specifically designed to facilitate massive listings like Reliance Jio and the National Stock Exchange (NSE), which would have struggled to offload a full 25% or even 10% stake in a single day without overwhelming market liquidity.
The New Graded IPO Framework
Instead of a one-size-fits-all 25% rule, the minimum shares a company must offer now depends on its post-issue market capitalisation.
| Post-Issue Capitalization | Minimum Public Offer (MPO) | Timeline to reach 25% MPS |
| Up to ₹1,600 Cr | 25% (Unchanged) | Immediate / 3 Years |
| ₹1,600 Cr – ₹4,000 Cr | Shares worth at least ₹400 Cr | 3 Years |
| ₹4,000 Cr – ₹50,000 Cr | 10% of equity | 3 Years |
| ₹50,000 Cr – ₹1 Lakh Cr | 8% or at least ₹1,000 Cr | 5 Years |
| ₹1 Lakh Cr – ₹5 Lakh Cr | 2.75% or at least ₹6,250 Cr | 5–10 Years* |
| Above ₹5 Lakh Cr | 2.5% or at least ₹15,000 Cr | 5–10 Years* |
*Note: For the largest categories, companies must hit 15% public float within 5 years and 25% within 10 years.
Key Highlights for Investors
- The “Jio” Clause: The most significant change is the reduction of the minimum float to 2.5% for companies valued above ₹5 lakh crore. This directly paves the way for Reliance Jio, which is valued by some bankers at over $170 billion (~₹14.5 lakh crore).
- Minimum Participation: Regardless of company size, the rules mandate that at least 2.5% of each class or kind of equity shares must be offered to the public to prevent promoters from holding onto superior voting rights exclusively.
- The “Glide Path”: SEBI has introduced a “mandatory glide path.” If a mega-firm lists with only 2.5%, it cannot stay there forever; it must gradually sell more shares to the public over a decade to improve market liquidity and governance.
- Standardized Listing: Any special securities (like differential voting rights) must now be listed on the same exchange alongside ordinary shares during the IPO.
Why the Change?
The government and SEBI cleared these changes (originally proposed in September 2025) to avoid “market flooding.” If a company like Jio were forced to sell 10% of its shares at once, it would require over ₹1.4 lakh crore from the market—potentially draining liquidity from every other stock on the exchange and causing a massive price crash.
The Immediate Pipeline
With these rules now in force (effective March 13, 2026), market analysts expect a flurry of activity:
- Reliance Jio: Likely to file its DRHP before the end of April 2026.
- NSE: Now has a clear regulatory path to list its own shares, with a syndicate of 20 bankers already appointed this week.
- PSU Exemptions: Most Public Sector Undertakings (PSUs) remain exempt from these MPS rules until August 2026, giving them a few more months to comply with the 25% requirement.
