Sebi Board Meeting Outcome.

The Securities and Exchange Board of India (Sebi) on Thursday announced a slew of measures for capital markets, including easing IPO norms for large companies, simplifying foreign investor access, and tightening governance in market institutions. The decisions were taken at the regulator;s board meeting on September 12.

IPO Norms Relaxed For Large Companies

In a major relief for companies eyeing large public floats, Sebi has eased the minimum public shareholding (MPS) requirements for firms with a market capitalisation of Rs 50,000 crore and above.

Companies valued between Rs 50,000 crore and Rs 1 lakh crore can now list with 8% public float, down from 10%. They will also get five years to raise their MPS to 25%, compared with three years earlier.

Those with over Rs 1 lakh crore market cap will be required to list only 2.75%, down from 5%.

For companies exceeding Rs 5 lakh crore market cap, the IPO float requirement has been cut to 2.5%.

These firms will now get 10 years instead of five to meet the 25% MPS norm.

The changes are expected to smoothen the listing path for giants such as Reliance Jio Infocomm and the National Stock Exchange (NSE), which have been awaiting clarity on IPO requirements.

Anchor Investor Framework Strengthened

The markets regulator also revamped the anchor investor framework to deepen institutional participation in IPOs.

The anchor portion has been raised from 33% to 40% of the institutional quota.

While one-third of the anchor book remains reserved for mutual funds, fresh space has been created for insurers and pension funds.

The number of anchor investors permitted per ₹250 crore of issue size has been raised from 10 to 15.

“This is aligned with global best practices and will broaden the quality of long-term institutional investors,” SEBI chairperson Madhabi Puri Buch said after the meeting.

SWAGAT-FI: A New Window For Trusted Foreign Investors

In a move aimed at attracting long-term, stable foreign capital, Sebi launched the Single Window Automatic and Generalised Access for Trusted Foreign Investors (SWAGAT-FI) framework. The new system simplifies registration for low-risk investors such as sovereign wealth funds, pension funds and central banks, allowing them:

Unified registration as both Foreign Portfolio Investors (FPIs) and Foreign Venture Capital Investors (FVCIs).

A single demat account to invest across routes.

Longer registration validity of 10 years, up from 3-5 years currently.

According to Sebi, these “trusted” investors represent nearly 70% of FPI assets under custody, and the simplified regime will significantly enhance India’s attractiveness as an investment destination.

REITs, InvITs Get Boost

To deepen participation in infrastructure and real estate investment vehicles, SEBI has broadened the definition of strategic investors in REITs and InvITs to include qualified institutional buyers, FPIs, pension funds, provident funds and insurers.

Further, REITs will now be classified as equity instruments, making them eligible for inclusion in equity indices, while InvITs will remain under the hybrid category. The move is expected to boost liquidity and mainstream REIT investments.

Mutual Fund Incentives, Exit Load Cut

Sebi has introduced new measures to encourage financial inclusion through mutual funds.

Exit load cap reduced from 5% to 3%, aligning with industry practice.

Distributors will be incentivised for:

• Onboarding new women investors.
• Bringing in investors from B-30 cities (beyond the top 30), with incentives capped at Rs 2,000 per investor.

Stronger Governance for MIIs

To strengthen governance in stock exchanges, clearing corporations and depositories — collectively termed Market Infrastructure Institutions (MIIs) — SEBI has mandated the appointment of two Executive Directors (EDs) as key managerial personnel.

One ED will oversee critical operations while the other will be responsible for compliance, risk management and investor grievances.

Stricter Norms for Related Party Transactions

For listed companies, Sebi has introduced a new turnover-linked materiality threshold for related party transactions (RPTs), with an absolute ceiling of Rs 5,000 crore. The move is aimed at protecting minority shareholders while offering operational flexibility to large firms.

AIF Framework Liberalised

Alternative Investment Funds (AIFs) also received regulatory flexibility.

Introduction of AI-only schemes (for accredited investors) with lighter compliance requirements.

Large Value Fund (LVF) threshold lowered from Rs 70 crore to Rs 25 crore, making it easier for investors to qualify.

Other Decisions

Registrars to an Issue (RTAs) will now come under activity-based regulation.

Investment advisers and research analysts will find it easier to qualify, with graduates from any stream eligible, subject to NISM certification.

Sebi plans to expand its local offices to more cities for better investor outreach.

The consultation on introducing a Closing Auction Session (CAS) in equity markets has been extended till September 19.