India’s capital markets regulator, the Securities and Exchange Board of India (SEBI), in its 211th board meeting, cleared a host of reforms spanning IPO norms, institutional participation, alternative investments, mutual funds, FPIs, and market infrastructure governance.
SEBI board meeting, chaired by Chairman Tuhin Kanta Pandey, comes at a time when several large companies such as Reliance Jio and LG are waiting in the wings to go public, while the long-pending NSE IPO is also nearing completion.
Together, the decisions on mega IPO norms aim at twin objectives: making it easier for companies and investors to participate in the market while tightening governance of critical institutions.
SEBI Board Meeting September 2025: Minimum Public Shareholding
At the heart of the IPO reforms 2025 lies SEBI’s recommendation to the Centre to relax Minimum Public Shareholding norms and Minimum Public Offer norms for very large issuers.
- INR 50,000 – 1,00,000 Cr MCap: IPO size of at least INR 1,000 crore plus 8% of post-issue market cap; 25% MPS to be achieved within 5 years (instead of 3).
- INR 1,00,000 – 5,00,000 Cr MCap: IPO of at least INR 6,250 crore plus 2.75%. If public shareholding <15% at listing, 15% must be achieved in 5 years and 25% in 10 years.
- Above INR 5,00,000 Cr MCap: IPO of at least INR 15,000 crore plus 1%, subject to minimum dilution of 2.5%.
“Large issuers face challenges in diluting substantial stakes upfront, as the market cannot absorb such a supply without depressing valuations,” Mr. Pandey noted. “A phased approach ensures liquidity while keeping investors protected.”
The changes are widely seen as a nudge to encourage India’s corporate giants to list domestically rather than overseas.
Anchor Investors: More Seats at the Table
SEBI board meeting also overhauled the anchor investor framework, expanding participation to include life insurers and pension funds alongside mutual funds.
- Reservation increased: 40% of anchor book (vs 33% earlier), of which MFs hold one-third, insurers and pension funds get 7%.
- More allottees: Issue sizes above INR 250 crore can now accommodate 30 anchor investors (up from 25).
This is expected to deepen institutional demand in IPOs and provide more stable capital at listing.
Alternative Investments: Accreditation Over Capital
SEBI approved creation of Accredited Investor-only (AI-only) AIF schemes, allowing lighter compliance and flexibility.
- Large Value Funds (LVFs): Minimum ticket size cut from INR 70 crore to INR 25 crore.
- Glide path: Existing schemes can continue onboarding under current rules; new funds may opt for AI-only classification.
This marks a shift from capital thresholds to investor sophistication as the key determinant for regulatory relaxations.
FPIs: SWAGAT-FI and India Market Access
To ease foreign participation, SEBI introduced the SWAGAT-FI framework (Single Window Automatic & Generalised Access for Trusted Foreign Investors), offering:
- Unified registration across investment routes.
- 10-year registration validity (vs current 3 years).
- Single demat account for all channels.
- Exemptions from repeated compliance.
Additionally, SEBI launched the India Market Access portal, a one-stop digital gateway to simplify navigation of India’s regulatory maze for global investors.
Mutual Funds: Lower Costs, Broader Access
- Exit load cap reduced to 3% (from 5%).
- B-30 city incentive rationalized: Max INR 2,000 or 1% of investment, applicable only to new PAN investors.
- Women investors push: Distributors incentivized for onboarding new women clients.
Related Party Transactions (RPTs): Smarter Materiality
A turnover-linked framework will replace the flat INR 1,000 crore or 10% cap:
- Up to INR 20,000 crore turnover: 10%.
- INR 20,001–40,000 crore: INR 2,000 crore + 5% of incremental.
- Above INR 40,000 crore: INR 3,000 crore + 2.5% of incremental, capped at INR 5,000 crore.
This makes compliance less onerous for very large firms while preserving shareholder oversight.
Market Infrastructure Institutions: Governance First
Recognizing their systemic importance, SEBI mandated:
- Appointment of two independent Executive Directors for operations and compliance/risk.
- Defined responsibilities for MD, CTO, and CISO.
- Stricter norms for directors holding external roles.
“This ensures public interest takes precedence over commercial motives,” SEBI said.
REITs, InvITs and Strategic Investors
- REITs reclassified as equity, paving the way for inclusion in MF equity schemes and indices.
- Strategic investor definition expanded for REITs/InvITs, aligning with global norms.
Broker Rules, CRAs and Derivatives: Other Agenda Items
While the press release focused on structural reforms, market chatter and live updates pointed to additional moves:
- Broker Regulations: Revamp underway, with stricter criteria for Qualified Stock Brokers (QSBs), enhanced client safeguards, and bans on unauthorized schemes.
- Credit Rating Agencies (CRAs): May soon be allowed to rate financial instruments regulated by RBI, IRDAI, PFRDA, IFSCA, MCA, and IBBI — broadening their mandate.
- Derivatives Expiry: Market speculation suggests SEBI could float a consultation paper on moving from weekly to monthly or fortnightly F&O expiries — a shift that brokerages warn could hit revenues of NSE and BSE significantly.
Regional Presence and Compliance Ease
- SEBI announced new offices in eight cities (Chandigarh, Jaipur, Lucknow, Guwahati, Bhubaneswar, Vijayawada, Hyderabad, Bengaluru).
- Issuers of listed non-convertible securities permitted to share annual reports digitally.
- Simplified rules for Investment Advisers and Research Analysts to encourage corporatisation and reduce compliance hurdles.
- Revamped RTA Regulations 2025 with activity-based oversight.
Final Words
The SEBI board meeting reflects pragmatic balancing act — less dilution pressure for mega IPOs, wider access for institutions and foreign investors, and tougher governance for market gatekeepers.
While the official reforms are sweeping, the “agenda chatter” — from possible F&O expiry changes to broker rule revamps — signals that SEBI is preparing for deeper structural shifts in India’s trading ecosystem.
For investors, the message is clear: expect more opportunities, but under tighter guardrails.