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December 9, 2025
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- Sun, 14 December 2025
SEBI (Securities and Exchange Board of India) in it’s recent board meeting in Mumbai, headed by Tuhin Kanta Pandey, announced various changes in the start-world.
These changes are start-up friendly, encouraging global investors to invest in India, helping start-up founders keep their ESOPs and making investing easier for angel investors.
Previously, SEBI had barred founders, aka “promoters”, from holding share-based benefits like ESOPs, and founders were unable to hold ESOPs once their company filed for IPO.
It is now changing: Now, founders will be able to retain their ESOPs even after filing for IPO,although they need to have a one year gap between going public and retaining their ESOPs.
This is of great significance as the founder’s stay invested in the growth of the company, it avoids forced liquidation as previously, founders were forced to liquidate their ESOPs and sell them and encourages more start-ups to list in India and go public.
Investors can make co-investments through a separate setup called a co-investment vehicle.
The idea behind it is simple: Investors can invest more in the companies they find more promising, where AIF has already invested.
By this, Investors will be able to directly participate in deals and can be more involved.
Many Indian-origin startups are incorporated abroad (e.g., in the US).
Bringing them back to India was tough due to IPO lock-in rules.
It had to wait for 1 year before going back, but now, shares from foreign convertible securities (CCS) are eligible for IPO sale without a 1-year holding meaning it is easier to move back to India.
Earlier, it was very hard for companies and NRIs to invest in IGB, aka Indian Government Bonds.
SEBI has changed that, as Indian Government Bonds are of low risk and easier to comply with, certain rules have changed to make it easier for NRIs to invest.
This is of great significance so that global investors can see India as a hub for great returns.
A string of decisions by SEBI shows greater trust into the ecosystem and providing greater freedom raises in investor confidence. With so many Indian startups looking to go public, SEBI’s decisions are warranted and come at an opportune time.
In the past 5 years, India’s startup ecosystem has seen significant growth, with the number of recognised startups increasing substantially.
India’s startup ecosystem is set to grow 2.6 times by 2030, fueled by rising digital connectivity and tech investment.
[This content is for informational purposes only and does not constitute legal, financial, or investment advice. This has been constituted based on third-party sources. We do not assume any liability for actions taken based on this information.
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