IPO rules: SEBI approves tweaks to lock-in norms, fund-raising, disclosures
The SEBI board also approved a proposal to replace the abridged prospectus with a concise Offer Document Summary containing only key information, aimed at making IPO disclosures more accessible to investors.
- Dec 17, 2025,
- Updated Dec 17, 2025 8:57 PM IST
The Securities and Exchange Board of India (SEBI) has relaxed pre-IPO lock-in norms by allowing the automatic lock-in of pledged shares. At present, promoters’ shares are subject to a six-month lock-in, with a similar requirement applicable to certain non-promoter holdings.
On Wednesday, the regulator announced a technology-driven mechanism that will enable pre-issue pledged shares to be appropriately marked as locked in, simplifying compliance for issuers and market intermediaries. The SEBI board also approved a proposal to replace the abridged prospectus with a concise Offer Document Summary containing only key information, aimed at making IPO disclosures more accessible to investors.
Explaining the rationale, SEBI chairman Tuhin Kanta Pandey said the board had decided to improve transparency around leveraged transactions.
"Today, the board decided to enhance transparency in leveraged transactions. The price at which shares were purchased in the past year, pre-IPO deals, and the volume-weighted average cost of equity over the last three years will now be clearly disclosed. This makes the information immediately visible without digging through documents, enabling investors to assess valuations and decide whether to subscribe based on informed debate and discussion," said SEBI chairman Tuhin Kanta Pandey.
IPO documents
SEBI noted that IPO documents, particularly draft red herring prospectuses (DRHPs), are often voluminous, making it difficult for investors to quickly identify key information. During consultations, stakeholders suggested introducing a separate summary document. The board, however, decided that this purpose would be better served through the abridged prospectus, which is already mandated under Section 33 of the Companies Act and therefore cannot be eliminated.
Accordingly, a draft abridged prospectus will now be made available at the DRHP stage itself, along with a QR code. This will enable investors to easily access important disclosures and announcements related to the IPO, helping them assess essential details without having to sift through lengthy documents, while still allowing full access for detailed due diligence.
SEBI clarified that, unlike the consultation proposal, there will be no separate summary document; instead, the abridged prospectus will be provided earlier in the process. On pre-issue capital, the existing lock-in framework remains unchanged, with promoters’ shares subject to a six-month lock-in and a similar six-month lock-in applicable to non-promoter shares.
The Securities and Exchange Board of India (SEBI) has relaxed pre-IPO lock-in norms by allowing the automatic lock-in of pledged shares. At present, promoters’ shares are subject to a six-month lock-in, with a similar requirement applicable to certain non-promoter holdings.
On Wednesday, the regulator announced a technology-driven mechanism that will enable pre-issue pledged shares to be appropriately marked as locked in, simplifying compliance for issuers and market intermediaries. The SEBI board also approved a proposal to replace the abridged prospectus with a concise Offer Document Summary containing only key information, aimed at making IPO disclosures more accessible to investors.
Explaining the rationale, SEBI chairman Tuhin Kanta Pandey said the board had decided to improve transparency around leveraged transactions.
"Today, the board decided to enhance transparency in leveraged transactions. The price at which shares were purchased in the past year, pre-IPO deals, and the volume-weighted average cost of equity over the last three years will now be clearly disclosed. This makes the information immediately visible without digging through documents, enabling investors to assess valuations and decide whether to subscribe based on informed debate and discussion," said SEBI chairman Tuhin Kanta Pandey.
IPO documents
SEBI noted that IPO documents, particularly draft red herring prospectuses (DRHPs), are often voluminous, making it difficult for investors to quickly identify key information. During consultations, stakeholders suggested introducing a separate summary document. The board, however, decided that this purpose would be better served through the abridged prospectus, which is already mandated under Section 33 of the Companies Act and therefore cannot be eliminated.
Accordingly, a draft abridged prospectus will now be made available at the DRHP stage itself, along with a QR code. This will enable investors to easily access important disclosures and announcements related to the IPO, helping them assess essential details without having to sift through lengthy documents, while still allowing full access for detailed due diligence.
SEBI clarified that, unlike the consultation proposal, there will be no separate summary document; instead, the abridged prospectus will be provided earlier in the process. On pre-issue capital, the existing lock-in framework remains unchanged, with promoters’ shares subject to a six-month lock-in and a similar six-month lock-in applicable to non-promoter shares.