Relaxed IPO Norms for Large Companies
SEBI eased minimum public shareholding (MPS) norms for mega IPOs, allowing large firms with market capitalisation above ₹5 lakh crore to dilute only 2.5% of their equity during listing, compared to the earlier 5%. For firms valued between ₹50,000 crore and ₹1 lakh crore, the 25% public shareholding requirement can now be achieved over five years instead of three.
The regulator also introduced flexible thresholds for companies with market capitalisation above ₹1 lakh crore, allowing them up to 10 years to achieve the mandated 25% MPS, depending on their post-issue structure. This move is expected to encourage more mega listings on Indian exchanges.
To simplify regulatory navigation for foreign investors, SEBI launched a dedicated digital platform—India Market Access. The single-window portal consolidates scattered compliance and procedural requirements, making it easier for Foreign Portfolio Investors (FPIs) to enter and operate in India’s securities market.
According to SEBI, the platform addresses long-standing concerns of global investors who often faced difficulties due to fragmented regulations and complex documentation requirements.
SWAGAT-FI Framework for Global Investors
In a bid to enhance investor confidence, SEBI introduced the Single Window Automatic & Generalised Access for Trusted Foreign Investors (SWAGAT-FI). This framework simplifies registration for low-risk FPIs and Foreign Venture Capital Investors (FVCIs), minimizing repetitive compliance and creating a unified system across investment routes.
The initiative aims to strengthen India’s image as an investor-friendly destination, making it easier for trusted global investors to participate in the domestic capital markets.
Boost for Alternative Investment Funds
To promote alternative financing, SEBI reduced the minimum investment threshold for Large Value Funds (LVFs) from ₹70 crore to ₹25 crore. The regulator also allowed the introduction of AI-only (Accredited Investor) schemes with relaxed compliance requirements, offering greater flexibility for sophisticated investors.
These changes are expected to attract significant risk capital, foster innovation, and provide new opportunities for startups and growth-stage companies.
Other Key Decisions
- Mutual funds’ maximum exit load reduced to 3% from 5%.
- REITs classified as equity for mutual funds, while InvITs remain hybrid instruments.
- Increased quota for insurance companies and pension funds in IPO anchor allotments, with overall anchor quota raised to 40%.
- Stricter governance requirements for stock brokers and materiality thresholds for related party transactions linked to company turnover.
- Mandatory appointment of two executive directors on boards of market infrastructure institutions.
Industry Impact
Market experts believe these reforms will deepen India’s capital markets and make them more attractive for global investors. By reducing compliance burdens, providing more flexible IPO norms, and offering new investment opportunities through AIFs, SEBI has signaled its commitment to balancing investor protection with ease of doing business.
Analysts say the combination of simplified rules and digital innovations like the India Market Access portal will enhance India’s competitiveness at a time when global capital flows are shifting towards emerging markets.