The Securities and Exchange Board of India (SEBI) on November 13, 2025, issued Consultation Paper on amendments to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, with the objective of enhancing ease of doing business and increasing the participation of retail investors in public issue.
This consultation paper seeks comments/suggestions from the public on the following proposals relating to amendments to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, (‘ICDR Regulations’) with the objective of enhancing ease of doing business and increasing the participation of retail investors in public issue:
• Review of the requirement of lock-in of shares at the time of Initial Public Offer (‘IPO’).
• Review of the requirement of Abridged Prospectus.
The ICDR Regulations require that the pre-issue capital held by promoters and persons other than the promoters to be locked-in for the period as specified under the Regulations. The existing system of the depositories does not allow lock-in of certain shares such as those under pledge. This creates challenges for the issuer at the time of IPO.
SEBI has received representations from the market participants highlighting challenges faced by the issuers in complying with the lock-in requirements pertaining to pre-issue capital held by persons other than the promoters, particularly in cases where pledges have been created prior to the IPO.
The ICDR Regulations already allow promoters to pledge locked-in shares and to release such pledges before an IPO with lender consent. A new enabling framework is proposed to similarly address lock-in requirements for pledged shares held by non-promoters.
The proposed framework includes:
• Introducing enabling provisions in the ICDR Regulations,
• Amending the issuer’s Articles of Association (AoA), and
• Mandating issuers to notify relevant lenders/pledgees.
Issuers planning a public issue must amend their AoA to specify that:
• Pledged equity shares will remain locked-in for the applicable ICDR-prescribed period.
• If a pledge is invoked, the shares will continue to be locked-in in the pledgee’s account for the remaining lock-in period.
• If a pledge is released, shares will remain locked-in in the pledger’s account for the remaining period.
Issuers must notify all lenders/pledgees of these AoA changes and disclose the same prominently in the DRHP/RHP, clarifying that any shares received on pledge invocation will remain locked-in for the balance period.
Depositories will implement system-level controls to automatically apply the remaining lock-in after pledge invocation or release.
Select NBFCs providing loans against unlisted shares have been consulted and have expressed agreement with the proposal.
The comments/suggestions should be submitted latest by December 4, 2025, through the following link: https://www.sebi.gov.in/sebiweb/publiccommentv2/PublicCommentAction.do?doPublicComments=yes
In case of any technical issue in submitting your comment through web based public comments form, you may send your comments through e-mail to [email protected] with the subject “Consultation Paper on amendments to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, with the objective of enhancing ease of doing business and increasing the participation of retail investors in public issue”.
