SEBI eases IPO norms for infotech companies

MUMBAI, August 18: The Securities & Exchange Board of India (Sebi) has relaxed the

rules governing initial public offerings (IPO) of information technology (IT) companies

from 25 per cent to 10 per cent of the issued capital. The companies will be required to

make a public offer for at least Rs 50 crore, offer at least 20 lakh securities and at

least 10 per cent of the securities issued by the company should be offered to the public.

The rationale behind the relaxation is to encourage large infotech companies to list in

the country instead of forcing them to seek a listing on international exchanges like

Nasdaq. These decisions were taken by the Sebi board here on Tuesday based on the

recommendations of its primary market advisory committee.

This follows a recommendation by the primary markets advisory committee that companies

in the telecom, media and IT sectors be permitted to offer limited public issues. The

regulator, however, did not approve the relaxation for media and telecom companies —

they already enjoy some relaxations made by Sebi earlier for infrastructure companies.

The Sebi board has also decided to rationalise the fee structure of the intermediaries

associated with the primary market. The objective was to bring uniformity in the fee

structure of the various intermediaries.