Sebi Unveils Sweeping Capital Market Revamp

The reforms are aimed at easing fundraising and listing norms, lift governance

- Neha Joshi

India's markets regulator on Friday unveiled a sweeping package of reforms designed to galvanize the capital markets by making fundraising easier, liberalizing listing norms for large companies, and tightening governance across key institutions, including stock exchanges.

The decisions, taken at a Securities and Exchange Board of India (Sebi) board meeting, will reshape everything from mega listings and related-party transactions to the way stock exchanges, brokers, and investment advisors are regulated.

In a move to attract marquee listings, Sebi has eased stake dilution norms for very large companies with market capitalization more than ₹50,000 crore and broadened the investor base.

Then, the regulator has overhauled corporate governance rules, replacing a flat turnover threshold for related-party transactions with a turnover-linked framework. The change will cut routine approvals for large firms while making boards more accountable for substantive deals.

Further, Sebi has given equity status to real estate investment trusts (REITs) and infrastructure investment trusts (InvITs), allowing mutual funds to invest in them in equity schemes and widening access to foreign and institutional investors to boost liquidity.

The regulator has also eased rules for investment advisers and research analysts by simplifying registration, relaxing qualifications, and allowing them to share verified performance data. They can also give second opinions on assets and charge up to 2.5% annually with client consent, lowering entry barriers while ensuring accountability.

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