Companies would have to make a mandatory exit offer to dissenting shareholders. This would be made if shareholders decided to use the funds generated through an initial public offer for purposes other than what is stated in the original objectives, according to The Economic Times report.

India's capital markets regulator SEBI had been considering changes in regulations to safeguard the interest of minority shareholders. The Securities Exchange Board of India wanted to safeguard the interest of minority shareholders who might have invested in a public debut based on the stated objectives and do not consider a proposed changed in the deployment scheme of a fund an advantage to their part.

There had been many instances where firms changed their deployment strategy for funds raised through an IPO after getting approval with the majority shareholders' votes. This was despite some minority shareholders in the company opposed to such moves.

Therefore, it was felt that disagreeing shareholders should also be given an exit opportunity. This could be done once shareholders feel not contented with such progress at the company, a senior Sebi official said. The proposed move would help companies become more serious in stating their objectives at the time they had filed for an IPO.