SEBI has, vide its circular dated April 7, 2026, granted a one-time relaxation to listed companies from the applicability of penal provisions under the SEBI Master Circular dated July 11, 2023, for failing to achieve the minimum public shareholding threshold of 25% (twenty five percent) (MPS) as prescribed under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. It is pertinent to note that the aforesaid relaxation is applicable for the period from April 1, 2026, to September 30, 2026. Under the existing regulatory framework, penal consequences for listed companies failing to meet MPS norms include imposition of fines, freezing of promoter shareholding, and other enforcement actions by stock exchanges and depositories. This relaxation, effective from April 7, 2026, has been granted by SEBI in light of representations from industry bodies regarding the challenges encountered by listed entities in achieving the MPS due to prevailing uncertain market conditions arising from ongoing geopolitical tensions and subdued investor participation. SEBI has also directed stock exchanges and depositories to withdraw any penal actions already initiated against listed entities for MPS non-compliance during the period of relaxation.

Read More: https://www.sebi.gov.in/legal/circulars/apr-2026/relaxation-from-the-applicability-of-sebi-master-circular-for-compliance-with-the-provisions-of-the-sebi-listing-obligations-and-disclosure-requirements-regulations-2015-on-non-compliance-with-the-_100787.html

Credits: Shubhangi Bhatnagar (Principal Associate) and Jasmine Brar (Associate)