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June 14, 2026
The Dispatch

Definition

Minimum Public Shareholding

Minimum public shareholding (MPS) is the SEBI rule requiring listed companies to keep at least 25% of shares with the public.

After listing, a company must ensure that public (non-promoter) shareholders hold at least 25% of its capital, usually within three years of the IPO. Newly listed companies that IPO at a smaller free float get a glide path to reach 25%.

Promoters dilute down to meet MPS through tools like an OFS through the exchange, a follow-on offer, or a qualified institutional placement. The rule promotes liquidity and prevents promoter over-concentration; SEBI can act against companies that fail to comply.

Related terms

  • Qualified Institutions Placement (QIP)A QIP is a fast way for a listed company to raise capital by selling shares only to qualified institutional buyers, without a full public offer.
  • Free FloatFree float is the portion of a company's shares that is freely available for trading by the public, excluding locked or strategic holdings.
  • Offer for Sale (OFS)An OFS is the route through which existing shareholders sell their shares to the public — either as part of an IPO or via a separate exchange mechanism — with proceeds going to them rather than the company.

Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.