Reliance Jio IPO crosses crucial hurdle as FinMin issues notification

Reliance Jio IPO Update: Reliance Jio -- the Reliance Industries conglomerate's telecom arm -- moved one step closer towards its proposed initial public offer (IPO) with the Ministry of Finance issuing an official notification in this regard on Friday. Capital market regulator SEBI had approved the proposal in September last year.

According to the notification, if the post-issue capital is up to Rs 1,600 crore, the company will be required to offer at least 25 per cent of its equity shares to the public.

If it is between Rs 1,600 crore and Rs 4,000 crore, the total value of the equity shares offered to the public must be at least Rs 400 crore.

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If it is between Rs 4,000 crore and Rs 50,000 crore, it must offer at least 10 per cent of its equity shares to the public.

It if is between Rs 50,000 crore and Rs 1 lakh crore, the minimum value of shares offered to the public must be Rs 1,000 crore and at least 8 per cent shares.

The public shareholding must be increased to 25 per cent within the next five years, under the following conditions:

If the post-issue capital is between Rs 1 lakh crore and Rs 5 lakh crore, the minimum value of the equity shares offered to the public must be Rs 6,250 crore, and at least 2.75 per cent shares must be offered to the public.

If it exceeds the Rs 5 lakh crore mark, the minimum value must be Rs 15,000 crore, and at least 1 per cent shares must be offered to the public.

Certain additional rules will also apply for very large companies:

If public shareholding at the time of listing is below 15 per,cent, it must be increased to 15 per cent within the next five years and to 25 per cent within 10 years.

If it is at 15 per cent or more, it must be increased to 25 per cent within five years.

Minimum public offer rule

In any situation, at least 2.5 per cent of equity shares must be offered to the public.

Superior voting rights

If promoters hold superior voting rights (SVR), these shares must be listed on the same stock exchange along with ordinary shares.

If a company fails to comply with public shareholding rules, the stock exchange can impose fines or penalties.

Also, companies listing in an International Financial Services Centre (IFSC) will need to offer only 10 per cent public shareholding instead of 25 per cent.