SEBI Board to Meet on Friday to Discuss Regulatory Reforms

The Securities and Exchange Board of India (SEBI) is set to hold its board meeting on Friday to consider a series of regulatory reforms aimed at simplifying compliance and encouraging investment in India. Sources indicated that the agenda will cover proposals ranging from easing IPO norms for large companies to introducing a single-window framework for low-risk foreign investors.

Key Agenda Items

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

Among the regulatory measures under consideration, SEBI may relax minimum IPO requirements for very large firms and extend the timeline for meeting minimum public shareholding (MPS) norms. The board is also expected to review initiatives to simplify compliance for foreign portfolio investors (FPIs), relax certain rules for accredited investors in alternative investment funds (AIFs), expand the scope of rating agencies’ activities, and grant equity status to REITs and InvITs.

Several of these proposals have already been circulated for public consultation, highlighting SEBI’s broader push to refine the regulatory landscape. This will mark the third board meeting under Chairman Tuhin Kanta Pandey, who took office on March 1.

Proposed IPO Reforms

The IPO reforms aim to encourage large issuers to list in India with reduced initial equity dilution:

• Companies with ₹50,000 crore–₹1 lakh crore market cap: Minimum public offer (MPO) of ₹1,000 crore or at least 8% of post-issue capital, with MPS target of 25% achievable over 5 years (instead of 3).
• Companies with ₹1 lakh crore–₹5 lakh crore market cap: MPO of ₹6,250 crore or 2.75% of post-issue capital, with MPS deadline extended up to 10 years depending on shareholding levels.
• Companies above ₹5 lakh crore market cap: MPO of ₹15,000 crore with at least 1% of post-issue capital and minimum dilution of 2.5%.

These measures would allow companies to list with smaller IPOs initially, gradually increasing public shareholding over a longer period, easing immediate financial burdens.

Single-Window Access for Low-Risk Foreign Investors

SEBI may also approve the SWAGAT-FI (Single Window Automatic & Generalised Access for Trusted Foreign Investors) framework. This initiative is designed to simplify registration and compliance for low-risk foreign investors, providing a unified process across multiple investment routes and reducing documentation requirements.

Eligible investors under this framework include government-owned funds, central banks, sovereign wealth funds, multilateral entities, highly regulated public retail funds, and appropriately regulated insurance and pension funds. The proposal is expected to enhance India’s appeal as an investment destination by easing market access for these entities.

Conclusion

Major revisions intended to promote large initial public offerings (IPOs), streamline compliance for foreign investors, and fortify the regulatory structure as a whole will be discussed at SEBI's next board meeting. If authorised, these actions might boost long-term growth in India's equity markets, increase market participation, and draw in foreign investment.