‘No minimum promoter contribution’

Capital markets watchdog SEBI relaxed the framework for follow-on public offers (FPOs), a move that will help promoters of companies to raise funds more easily through this route.

The applicability of minimum promoters’ contribution norm and the subsequent lock-in requirements for the issuers making the FPO have been done away with by the regulator, as per a notification.

Earlier, promoters were mandated to contribute 20% towards a FPO.

Besides, in case of any issue of capital to the public, the minimum promoters’ contribution was required to be locked-in for three years.

SEBI said the relaxation would be available for those companies which are frequently traded on a stock exchange for at least three years. Also, such firms should have redressed 95% of investor complaints.

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