Sebi Board To Unveil Strategic Reforms Today: IPO Norms And Foreign Investment In Focus

The Securities and Exchange Board of India (Sebi) convenes its highly anticipated board meeting today, September 12, 2025. Market participants, investors, and industry watchers keenly await crucial decisions and regulatory reforms expected to shape India’s capital markets landscape. Under the chairmanship of Tuhin Kanta Pandey, this meeting marks the third such gathering addressing a broad agenda focused on easing compliance, boosting investor participation, and refining market governance.

 

Key Highlights Of The Sebi Board Meeting Agenda

 

Relaxation of minimum IPO shareholding and dilution norms to ease the burden on large companies and encourage more listings.

 

Simplification of compliance requirements for foreign portfolio investors (FPIs) aimed at attracting greater foreign capital inflow.

 

Expansion of regulation scope for Alternative Investment Funds (AIFs), especially easing norms for accredited investors and lowering entry barriers.

 

Consideration of granting equity status to Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs), widening their investment appeal.

 

Updating and tightening governance norms for rating agencies, stock brokers, and registrar and share transfer agents to improve market integrity.

 

Relaxing IPO Norms For Large Issuers

One of the most anticipated moves is the proposed easing of minimum public offer (MPO) and minimum public shareholding (MPS) requirements for mega IPOs. The current rule requires companies with a market capitalization above Rs 50,000 crore to meet MPS norms within a three-year horizon, often forcing large-scale equity dilution upfront.

 

Sebi is expected to approve a graduated timeline where large issuers can initiate with smaller IPOs—such as Rs 1,000 crore minimum for Rs 50,000 to Rs 1 lakh crore companies and extended periods to achieve 25% public shareholding, up to five years or beyond for larger caps. This reform aims to balance capital-raising needs with market liquidity and investor protection.

 

Enhancing Foreign Portfolio Investor Experience

Easing regulatory compliance for FPIs is another critical agenda point, with proposals focusing on single-window access for low-risk foreign investors, simplified registration, and reporting processes. These measures are designed to position India as a more attractive destination for overseas investment, supporting market depth and stability amidst global capital competition.

 

Boosting Alternative Investment Fund Ecosystem

Sebi intends to expand access to AIFs, notably lowering minimum investment thresholds for large value funds (LVFs) from Rs 70 crore to Rs 25 crore, coupled with reduced audit requirements. Relaxed norms for accredited investors are expected to spur fund inflows into infrastructure, startups, and other segments vital for economic growth.

 

Broader Market Governance And Transparency Initiatives

The board is likely to finalise rules enhancing transparency in related party transactions through turnover-based disclosures. Regulatory frameworks governing rating agencies, brokers, and registrars will also be updated to align with global best practices, boosting trust and efficiency in capital markets.

 

Equity-Like Status For REITs And InvITs

Granting REITs and InvITs equity-like status is poised to widen their appeal among institutional and retail investors, encouraging capital deployment in real estate and infrastructure sectors. Finalising provisions around strategic investments and governance of these trusts will facilitate market growth and diversification.

 

What Investors Should Watch Closely

This Sebi board meeting holds the promise of striking a balance between investor protection and market facilitation, potentially making India’s capital markets more competitive on the global stage. Market participants eagerly await the official announcements which could provide clarity and direction for issuers, investors, and intermediaries.

 

Sources: The Hans India, Business Standard, Moneycontrol, Economic Times, Sebi Official Releases