SEBI Board Reforms: Startups, AIF CIVs, REITs and PSU Delisting
Why in the news
A SEBI board meeting cleared broad changes to ease startup fundraising, simplify PSU delisting and give AIFs, REITs and InvITs more room.
Startups and IPOs
- ESOPs for founders allowed if granted a year or more before DRHP filing.
- Senior management must dematerialise holdings before DRHP.
- One-year lock-in on shares from compulsorily convertible securities removed.
- Reverse flipping encouraged; foreign VC, AIF and public financial institution holdings count towards promoter contribution.
AIF co-investment
- CIVs for Category I and II AIFs let investors co-invest without outside PMS routes or breaching unlisted-company limits.
| REIT/InvIT area | Change |
|---|---|
| Related-party units | Not public holding |
| HoldCo cash flow | Negative standalone cash set off against SPV income, with disclosures |
| Private InvIT minimum | Down from ₹1 crore to ₹25 lakh |
PSU delisting
- Easier exit where the state holds 90% or more; around five listed PSUs may benefit.
Exam angle
- DRHP: Draft Red Herring Prospectus.