In its latest board meeting held in June 2025, the Securities and Exchange Board of India (SEBI) announced a series of reforms aimed at enhancing Ease of Doing Business, improving transparency, and making Indian capital markets more flexible.
From changes in IPO rules to enabling co-investment through AIFs and simplifying PSU delisting — this blog explains every major reform with real-world use cases and examples.
Promoters were not allowed to include Compulsorily Convertible Securities (CCS) as part of their Minimum Promoter Contribution (MPC).
Shares obtained from CCS had a 1-year holding lock-in before they could be sold in IPO.
Now, even non-promoters holding CCS can contribute toward the promoter quota.
The 1-year lock-in on CCS shares has been removed.
Promoters can now retain ESOPs at the time of DRHP filing.
Suppose Flipkart plans an IPO and its early employees or angels have CCS. They can now sell those shares directly in the IPO, reducing dilution worries and giving quicker exits.
Some shareholders held shares in physical form, delaying IPO processing.
All stakeholders like Promoter Group, KMPs, QIBs, Directors must demat their shares before DRHP.
It helps SEBI:
Track frauds
Monitor seller identity
Ensure smoother settlement
AIF managers couldn't offer co-investment flexibility or advisory services on listed securities.
SEBI has introduced CIV (Co-Investment Vehicle) model.
Accredited Investors in an AIF can co-invest in specific unlisted companies via CIVs.
CIV must be a scheme of Category I or II AIF
Separate demat, PAN, and bank for each CIV
Only for Accredited Investors
Filing of Shelf PPM (Private Placement Memorandum) required
Blume Ventures investing in a startup like Zepto can now offer select HNIs in its AIF the opportunity to co-invest directly via a CIV, with regulatory backing.
Promoters had to liquidate ESOPs before IPO.
Promoters can hold ESOPs during IPO filing, easing structuring for startups.
Zomato’s founder can now retain his ESOPs when filing DRHP, rather than hurriedly converting or liquidating them.
PSUs with >90% Govt. stake faced delays and complications in delisting.
Fixed-price delisting now possible with minimum 15% premium.
Delisting becomes smoother with strike-off provision.
Unaccepted shares will go to Investor Education and Protection Fund (IEPF) after 1 year.
If BHEL is delisted, the Government can offer a fixed price (15% premium) to minority shareholders for buyback.
Related parties can’t be considered “public” unless they are QIBs
Minimum investment reduced to ₹25L for private InvITs
Clarity on regulated vs. unregulated activities
Disclosure documents for PMS providers like Marcellus, Motilal Oswal are now simplified
FPIs investing under Fully Accessible Route (FAR) for G-Secs now face lower compliance burdens.
SEBI brings a one-time settlement for:
Brokers involved in NSEL trades
Venture Capital Funds (VCFs) facing winding-up violations
| Regulation | Key Change | Beneficiaries |
|---|---|---|
| ICDR | Relaxed CCS & ESOP norms | IPO-bound companies |
| AIF | CIV Co-investment model | PE/VC Funds, HNIs |
| PSU Delisting | Fixed Price Delisting | Govt., Retail Investors |
| REIT/InvIT | Lower ticket size | Infra & Real Estate Investors |
| FPIs | FAR relaxation | Global Investors |
| Merchant Bankers | Clear activity norms | MBs in mid-size firms |
| SSE | Broadened eligibility | NGOs, Trusts, CSR Entities |
| PMS | Simplified disclosures | Wealth Managers |
Q: Will these norms reduce IPO preparation time?
A: Yes. By relaxing the demat and CCS norms, companies can fast-track IPO readiness.
Q: How does CIV benefit AIF investors?
A: It enables HNIs to participate in the same deal as the fund, with safeguards like separate accounts and SEBI filing.
Q: Why is fixed-price delisting important?
A: It removes uncertainty and speeds up the delisting process for PSUs.
SEBI’s June 2025 reforms are a major leap toward making India’s capital markets more inclusive, transparent, and aligned with global best practices. Whether you’re a startup planning an IPO, a fund manager, or a retail investor — these changes open new doors for growth and participation.
