How Sebi's new IPO rules could be a game changer for Reliance Jio and NSE

Synopsis

Sebi has halved the minimum public offer requirement for mega IPOs, paving the way for Reliance Jio and NSE to list without flooding markets. The move is expected to ease liquidity concerns and support India’s biggest-ever public offerings in 2026.

India’s capital markets regulator, Sebi, has cleared a major hurdle for some of the country’s largest companies eyeing stock market debuts. Sebi has relaxed rules on minimum public offer (MPO) and minimum public shareholding (MPS) norms, making it easier for giants like Reliance Jio and the NSE to go public without overwhelming the market.

Until now, firms with a market value above Rs 5 lakh crore were required to sell at least 5% of their equity through an IPO. For Reliance Jio, valued at more than Rs 13.5 lakh crore by Goldman Sachs in a bull case, this would have meant raising over Rs 58,000-67,500 crore in one go — a supply size analysts say Indian markets would struggle to absorb.

Sebi’s new proposal halves this requirement to 2.5%, which would translate into an IPO size of just above Rs 30,000 crore for Jio. Reliance chief Mukesh Ambani said the digital behemoth would come to public markets in the first half of 2026, aiming to create unprecedented value for investors, similar to that of global peers.

Brokerage Citi said that the change not only eases the immediate supply burden but also reduces concerns about a "holding company discount" for Reliance Industries, Jio’s parent.

The revised framework also extends the timeline for companies to meet the 25% MBPS requirement, allowing them to dilute stakes gradually over up to 10 years. This ensures liquidity is not drained from the secondary market by large one-time issues.

Also Read: Will Sebi end weekly expiry? Here's what Chairman Tuhin Kanta Pandey said after board meeting

Boost for NSE listing

The NSE, expected to list next year with a valuation of more than Rs 5 lakh crore, is also another major beneficiary. Bankers said reduced float requirements will help avoid an IPO glut that could dry out investor appetite at a time when several big-ticket offerings are in the pipeline.

In the past, Sebi has made exceptions for mega listings, most notably for LIC in 2022, when it allowed the insurer to float just 3.5% of its equity to raise Rs 21,000 crore. But the new norms bring consistency and predictability to how very large companies can approach the market.

The shift comes as the IPO market in India braces for a massive pipeline of Rs 2.8 lakh crore. According to data from Primedatabase, Sebi has given green light to issues worth about Rs 1.14 lakh crore, and Rs 1.64 lakh crore worth of offers are pending approval.

With Reliance Jio’s much-anticipated listing — which could value the company as high as Rs 13.5 lakh crore — India is preparing for what may be its largest IPO in history. Analysts say Sebi’s relaxation is a “game-changer” that ensures such large issues are both feasible and less disruptive to market liquidity.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)

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