This website is only for informational purposes. Visitors are requested to note that the information is intended to be correct, complete, and up-to-date. Juris Corp does not warrant that the information contained on this website is accurate or complete, and disclaims any and all liability to any person for any loss or damage caused by errors or omissions, whether such errors or omissions result from negligence, accident or any other cause.

This website is not intended to be a source of advertising or solicitation. The reader must not consider the information contained herein to be an invitation for a lawyer-client relationship, must not rely on information provided herein and must seek independent advice. Transmission, receipt or use of any information on this website does not constitute or create a lawyer-client relationship. No recipients of content from this website should act or refrain from acting, based upon any or all of the contents of this website.

Furthermore, Juris Corp does not wish to represent anyone desiring representation based solely upon viewing this web site. Finally, the reader is warned that the use of e-mail for confidential or sensitive information is susceptible to inherent risks of lack of confidentiality associated with sending e-mail over the internet.

By clicking on the "I understand and agree" button below, the user acknowledges that:

  • This website is not a mode of advertisement, promotion, personal communication, or solicitation of any sort whatsoever and the user wishes to gain information about us for his/her own reasons;
  • Entering into this website does not establish a lawyer-client relationship.

We are not liable for any consequence of any action taken by the user relying on information provided under this website. In cases where the user has any legal issues, he/she must seek independent legal advice.

JC - Legal Updates - IPO & FPO lock-in requirements relaxed!

Legal Updates

18 Aug 2021

IPO & FPO lock-in requirements relaxed!

The lock in requirements in an initial public offer (“IPO”) and further public offer (“FPO”) for promoters and persons other than promoters have been relaxed. Following are the key amendments introduced:

1.    ‘Promoter group’ definition narrowed

A body corporate shall no more be treated as part of the promoter group of an issuer merely because a group of individuals/companies/combinations thereof (acting in concert) hold 20% or higher of its share capital, and they also hold 20% or more of the share capital of an issuer company (and are acting in concert).

2.    Reduction of promoter and non-promoter lock-in:

(a)  Promoters:

(i)   Minimum promoters’ contribution (“MPC”) under an IPO / FPO shall now be locked-in only for a period of 18 months as against the previous lock-in requirement of 3 years.

(ii)  Promoters’ holding exceeding MPC in an IPO/FPO shall now be locked in for a period of 6 months as against the previous lock-in requirement of 1 year.

The above relaxations however, shall not be applicable in case majority of the IPO/FPO issue proceeds (excluding the portion of offer for sale) are utilised for capital expenditure which has been defined to include civil work, miscellaneous fixed assets, purchase of land, building, plant and machinery, etc.

(b)  Non-Promoters:

(i)   The entire pre-issue capital of non-promoters shall now be locked-in for a period of 6 months as against the previous lock-in requirement of 1 year.

(ii)  The lock-in (from date of purchase) applicable to (i) venture capital funds, (ii) category I or category II alternative investment fund or (iii) foreign venture capital investors has been reduced to 6 months as against the previous lock-in requirement of 1 year.

The Securities and Exchange Board of India (“SEBI”) has introduced the above amendments by way of an amendment to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.


For any further information, please contact Ms. Apurva Kanvinde (apurva.kanvinde@jclex.com) or Mr. Sumitava Basu (sumitava.basu@jclex.com).