India plans bigger institutional role in public offers by small firms, sources say

MUMBAI: India’s markets regulator is considering applying some rules designed for large companies to public offers by smaller businesses, including a quota for institutional investors ahead of share sales, two sources with direct knowledge of the matter said. The regulator is also mulling raising the limit on the size of companies that can list on platforms dedicated to small firms and mandating larger operating profit requirements before listing, the sources, who did not want to be named as the discussions are private, said. The potential change in rules comes after regulatory warnings about small businesses diverting funds raised from public markets and an investigation into investment banks extracting unusually high fees and juicing subscription numbers. They also echo regional trends as Hong Kong’s exchange questions the need for a junior market. In India, small businesses with paid-up capital of up to 1 billion rupees ($10.5 million) cab list on separate sections of the BSE and National Stock Exchange of India. These have fewer disclosure requirements and offerings are vetted by the exchanges as opposed to large IPOs which have to be cleared by the Securities and Exchange Boar