Sebi likely to green-light new norms for large IPOs, FPIs at Friday meet

According to the source, the number of anchor allottees for IPOs sized at Rs 250–500 crore is proposed to be raised from 25 to 30, while insurers and pension funds may be included alongside mutual funds in the reserved anchor portion, by increasing the reserved portion from 33% to 40%. The proposal is to allow mutual funds to retain 33%, with the remaining 7% for insurers and pension funds. Unsubscribed portions could revert to mutual funds, diversifying the investor base.

On the proposal to amend the materiality threshold for related party transactions, on which also there was a draft paper, the source said the board may approve a threshold-based framework to determine the materiality of related party transactions while linking the compliance burden with the turnover scale of listed entities.

The new framework for related party transactions is expected to ease compliance while protecting minority shareholders by linking the related party transactions materiality thresholds to the turnover of the company. Accordingly, companies with turnover up to Rs 20,000 crore would treat such transactions exceeding 10% of turnover as material. For Rs 20,001–40,000 crore turnover, thresholds will be Rs 2,000 crore plus 5% of incremental turnover. For turnover above Rs 40,000 crore, the limit will be Rs 3,000 crore plus 2.5% of incremental turnover, capped at Rs 5,000 crore, the source said.

Currently, the Sebi norms require shareholder approval for related party transactions exceeding Rs 1,000 crore or 10% of turnover.

The board may also clear the path for credit rating agencies to rate financial instruments overseen by other financial sector regulators like RBI, Irdai, Pfrda, IFSCA, MCA and IBBI, provided they comply with the respective regulatory framework on eligibility, risk management, grievance redressal, and enforcement, the source said.

There is also a proposal to classify Reits and Invits as equity, which are currently treated as hybrid instruments blending debt and equity features. This idea is to allow mutual funds to include these instruments in equity schemes, increasing retail investor access and boosting participation.

Another proposal that may get the green light is to separate AIF schemes for accredited investors by approving a new type of alternative investment fund scheme exclusively for accredited investors with a lighter regulatory framework.