SEBI Eases IPO Route for Startup Founders

The Securities and Exchange Board of India (SEBI) has provided significant relief for startup founders aiming to go public by approving a new regulation. This adjustment allows these entrepreneurs to retain employee stock options (ESOPs) granted at least one year before filing their initial public offering (IPO) paperwork.

Under prior rules, promoters could not hold or be given share-based benefits like ESOPs. If they held such benefits, a liquidation was required before filing. This change will now benefit founders classified as promoters, allowing them to retain and benefit from these options post-IPO.

Additionally, the SEBI board has simplified disclosure norms for Qualified Institutions Placement (QIP). By focusing on relevant, concise information, the board seeks to streamline the document preparation process, eliminating redundant disclosures already accessible publicly. This move promises efficiency and clarity for issuers and investors.

(With inputs from agencies.)