SEBI's new IPO rules are a game-changer for startup founders
SEBI just rolled out fresh IPO rules (announced June 18, 2025) to make life easier for India's founder-led startups.
Now, founders can keep and use their ESOPs—as long as they got them at least a year before filing the IPO draft—so no more surrendering those hard-earned shares before going public.
More flexibility in share counting and promoter contributions
Startups can now count shares from fully paid CCPS toward the required 20% promoter contribution, opening the door for more institutional and non-promoter investors.
This should help boost India's already busy IPO scene—over 90 filings in early 2025 alone.
Areas still needing a bit of polish
Despite these updates, founders who together own over 10% are still tagged as "promoters," which limits new ESOP grants and complicates lock-in rules.
Plus, there's still some confusion around how these changes apply to reverse-flip cases.
More tweaks could make things even smoother for future startup listings.