India's market regulator, the Securities and Exchange Board of India (SEBI), has introduced new measures designed to facilitate foreign investor access and support sizable Initial Public Offerings (IPOs) in light of significant outflows this year. In 2025, foreign investors have withdrawn $11.7 billion from equities and debt, influenced by U.S. tariffs, subpar earnings, and elevated valuations, according to Reuters. To attract capital inflows, SEBI has inaugurated a streamlined single-window clearance system for overseas funds, encompassing both sovereign-backed and retail investors, and has relaxed IPO regulations.
For large corporations with a post-IPO market capitalization exceeding INR 5 trillion, the requirement to sell shares has been reduced from 5% to 2.5%, with an extension of the timeline to achieve a 25% public float now set at five years. Additionally, companies with a market capitalization surpassing INR 1 trillion may be granted up to ten years to meet this threshold. SEBI has also simplified disclosure requirements pertaining to minor related-party transactions. These reforms aim to facilitate the absorption of large IPOs, thereby strengthening India's flourishing listings market, which is projected to generate approximately $20 billion in 2025.
