Institutional Placement Programme (IPP)

The Institutional Placement Program (IPP) was approved by Securities and Exchange Board of India (SEBI) at its board meeting held on 3 January 2012.  IPP is one of the methods available to Indian listed companies for the purpose of complying with minimum public shareholding requirements under the Securities Contracts Regulation (Rules), 1957 (SCRR).  The IPP enables private companies to comply with the mandatory listing requirement of 25% public shareholding. The IPP allows promoters to either issue fresh equity or sell their holding by up to 10% of the total equity through an auction, albeit ‘only for the purpose of complying with minimum public shareholding requirements’. Apart from this, it makes easier for government to sell up to 10% of its stake in listed public sector companies. The Government faced a huge shortfall vis-à-vis its disinvestment target of Rs. 40,000 crore for 2011 and IPP route was just like a shot in the arm.

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