Sebi Board to Consider IPO Norms Ease, SWAGAT-FI Framework on Friday

Mumbai, September 11 – The Securities and Exchange Board of India (Sebi) will consider a slew of regulatory reforms in its board meet on Friday. The proposals include relaxing IPO norms for exceedingly large firms, stretching timelines for attaining minimum public shareholding, and ease of compliance processes for foreign investors with a new entry framework.

IPO Protocols for Large-Cap Companies

One of the most important agenda items is a scheme that aims to ease IPO requirements for very large market capitalisation companies. Firms with a market cap between ₹50,000 crore and ₹1 lakh crore would be permitted to offer a minimum public offer of ₹1,000 crore and dilute at least 8% of issue post-capital. They would have five years, rather than the existing three, to achieve the 25 percent minimum public shareholding norm.

For firms with market capitalization between ₹1 lakh crore and ₹5 lakh crore, the minimum public offer is set at ₹6,250 crore with a minimum 2.75 percent dilution. These companies would have up to 10 years to adhere to public shareholding norms, based on their shareholding pattern. Companies worth more than ₹5 lakh crore would have to make a minimum public offer of ₹15,000 crore, or at least 1 percent of post-issue capital, with the minimum dilution requirement of 2.5 percent.

The model is designed to provide very large issuers the freedom to come to the market with relatively smaller IPOs while complying with regulations over a longer horizon.

SWAGAT-FI to Facilitate Foreign Investor Entry

The board is also going to consider the launch of SWAGAT-FI, or Single Window Automatic and Generalised Access for Trusted Foreign Investors. The system is intended to make entry easy for low-risk foreign investors such as sovereign wealth funds, pension funds, multilateral organizations, central banks, regulated retail funds, and insurance companies.

Once approved, SWAGAT-FI would allow for a single registration process for several investment paths, resulting in far less duplication of compliance and simplifying documentation burdens. Sebi intends to make India’s capital markets more accessible and competitive globally by reducing barriers for such investors.

Other Proposals on the Agenda

The meeting will also touch upon relaxation of measures for accredited investors for specified Alternative Investment Funds, a widened range of operations for credit rating agencies, and the suggestion to provide equity status to Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). Bringing the instruments in line with international practices is anticipated to increase participation and expand the investor base.

Broader Context

This marks the third board meeting under Sebi Chairman Tuhin Kanta Pandey, who assumed office on March 1. Many of the proposed changes have already been circulated for public consultation, signaling Sebi’s intent to modernize its regulatory approach, encourage large issuers to list domestically, and deepen foreign participation in Indian capital markets.

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