The Securities and Exchange Board of India (SEBI) has announced major reforms aimed at making Indian markets more attractive to global investors and easing the path for large companies planning public listings. The new measures, revealed after SEBI’s latest board meeting, reduce IPO requirements, relax public float timelines, and introduce simplified entry for low-risk foreign investors.
According to Reuters, companies with a post-listing market capitalization above ₹5 trillion will now need to sell only 2.5% of their share capital in an initial public offering, compared with the earlier 5% rule. This change is expected to benefit mega IPOs that previously struggled to absorb such large issues in the market.
In addition, Hindustan Times reported that the time allowed for firms to meet the 25% public shareholding rule has been extended. Companies valued between ₹500 billion and ₹1 trillion post-listing will now have five years, up from three, while firms above ₹1 trillion will get as long as ten years to comply.
The regulator has also introduced a single-window clearance system for “low-risk” foreign investors such as sovereign wealth funds and overseas retail funds. Under this system, documentation and compliance will be significantly simplified, making India’s capital markets more accessible at a time when foreign portfolio investors have pulled out nearly US$11.7 billion from equities and debt in 2025.
Business Today highlighted that SEBI also eased rules on related-party transactions, with only high-value deals now requiring shareholder approval, while low-value transactions will be exempt from detailed disclosure. This alignment with company turnover thresholds is expected to cut compliance costs.
These reforms come at a critical moment for Indian markets. SEBI chair Tuhin Kanta Pandey said the changes were designed to maintain India’s standing as a competitive global investment destination. Analysts believe the move could support a robust IPO pipeline, with expectations that Indian companies could raise close to US$20 billion through public offerings in 2025.
