These changes, which were rolled out in phases starting March 2024 into 2025, will shape how marquee listings like those of the National Stock Exchange (NSE) and Reliance Jio come to market, potentially unlock long-delayed deals, and reduce the risk of regulatory bottlenecks.
Mint explains how these reforms will reset India’s IPO playbook by balancing speed with accountability, and what they mean for companies, investors and the market.
Why is Sebi reforming the IPO process now?
The regulator is responding to both demand and delays. In FY25, ₹4.3 trillion was raised through the primary markets, and another ₹1.4 trillion is expected to be raised this year. But many companies have faced delays of six months or more in receiving regulatory approvals.
“Sebi recently accelerated the IPO approval process, aiming to clear most filings within three months, something that previously took up to six months,” said Narinder Wadhwa, managing director and CEO of SKI Capital Services.
How will Sebi speed up approvals?
Technology and manpower are at the heart of Sebi’s reset. Experts told Mint the regulator already uses artificial intelligence tools to scan disclosures and flag inconsistencies, and that these tools handle up to 80% of routine data checks.
They added that Sebi’s corporate finance department has ramped up its processing capacity and has tackled a record number of applications in recent months. Merchant bankers are being engaged earlier, allowing for quick clarifications instead of a lengthy back-and-forth.
“For companies, faster IPO approvals mean quicker access to public capital, supporting their growth and expansion plans. For the market, this move is likely to boost IPO activity, with expectations of record fundraising in 2025,” Wadhwa said.
What are the new disclosure requirements?
In March, Sebi introduced an expanded 31-point disclosure checklist for companies looking to go public. It covered, among other things, conflicts of interest among promoters, management, shareholders and service providers, related-party transactions across listed and unlisted entities, detailed group structures and cross-holdings, pending litigation and contingent liabilities, and private shareholder agreements impacting control or governance.
“To further speed up the process, Sebi has introduced 31 new mandatory disclosures related to conflicts of interest involving management, large shareholders, subsidiaries, and third-party service providers. These are designed to promote transparency and reduce the need for back-and-forth clarifications, allowing regulators to process applications more efficiently,” Wadhwa said.
Some experts said the requirement to disclose pending litigation or disputes could be pose a challenge to companies, especially in cases where the material impact on the company is uncertain. Saurabh Bansal, founder of Finatwork Investment Advisor, said, “Companies may need to carefully assess the materiality of each case to avoid unnecessary disclosures or potential legal repercussions. The proposed regulations require companies to disclose detailed information on related-party transactions may pose challenges for companies with complex group structures, where such transactions are common.”
Will the new rules complicate large upcoming IPOs like those of Jio and NSE?
Complex conglomerates face a daunting compliance burden. Lawyers who specialise in IPOs space said Reliance Jio must detail its various verticals, cross-holdings, and extensive group transactions, while NSE needs to address legacy regulatory concerns and governance issues linked to its clearing corporation.
“The expanded disclosure framework is expected to create substantial challenges for NSE and Jio due to their complex corporate structures and extensive related-party transactions. They may need longer to prepare,” said Diviay Chadha, partner at Singhania & Co.
Chadha added while AI could expedite approvals, extensive disclosure obligations would lengthen the preparation process, potentially nullifying any gains. The new disclosure rules could also influence valuations through greater transparency, he said. “With NSE’s IPO reportedly nearing Sebi approval, the measures appear to be enabling rather than obstructing marquee listings. Sebi’s mandate to complete rights issues within 23 working days from board approval reflects its push for stricter timelines across public market activities,” he added.
NSE, valued at more than ₹4.15 trillion (about $50 billion), is expected to finally move forward with its IPO in 2026, aided by its recent ₹1,000 crore regulatory settlement with Sebi.
Reliance Jio, valued at ₹9.96 trillion (about $120 billion), is actively exploring a listing under relaxed float norms proposed by Sebi. These proposed rules would reduce the mandatory percentage of shares that large companies must make available to the public, making a listing more feasible for Jio.
Kamlesh Varshney, whole-time member of Sebi, said at the FICCI Capital Markets Conference in August, “We don’t want a backlog of more than two to three months, except some difficult cases where there is some kind of a violation. We want to ensure that [IPO] applications are processed in reasonable amount of time.”
What risks do companies face with these rules?
While they may shorten timelines, the new rules will also introduce new risks concerning accuracy and liability. Omitted or misleading disclosures around promoter links, material litigation, or private agreements could invite rejection or even penalties.
Alay Razvi, managing partner at law firm Accord Juris, said, “The new disclosure checklist may increase legal risks. Any inaccurate or omitted disclosure, whether related to group structures or related-party dealings, opens companies to rejection or future liability.” He added that with Sebi using AI for vetting, gaps or inconsistencies in disclosures can no longer slip through. “Issuers must be doubly cautious. Any ambiguity could result in swift regulatory action that would impact an IPO’s viability after months of preparation,” he said.
