The Securities and Exchange Board of India (SEBI) has introduced major reforms aimed at boosting foreign investor participation and streamlining Initial Public Offerings (IPOs). These measures are designed to strengthen India’s position as a leading global investment destination.
SEBI has launched the Single Window Automatic & Generalised Access for Trusted Foreign Investors (SWAGAT-FI) framework. This program is designed for low-risk foreign investors, such as sovereign wealth funds, pension funds, and central banks.
The framework simplifies registration and compliance by reducing documentation requirements, along with a KYC charge of USD 2,500. This will be valid for 10 years. The investors are also exempt from the 50% limitation on government bond investment, allowing for more capital inflows into India's debt market.
To ease access to IPOs, SEBI has made relaxations in rules for big companies:
Decreased Minimum Offer Size: For enterprises with a post-listing market capitalization of greater than Rs. 5,000 crores, SEBI has relaxed the minimum public offer size from 5% to 2.5%.
Long-Term Public Float Timelines: Companies listed with less than 15% of shares in the public float now have ten years to reach a minimum of 25% public shareholding. Others with a public float of 15% or above are required to do the same within 5 years.
Such changes will make larger IPOs more attractive and more accessible to investors.
SEBI has also introduced provisions for better corporate governance:
Related Party Transactions: Shareholder approval thresholds for significant related-party transactions have been increased, using a scale-based method tied to the company's turnover.
Expansion of Anchor Investor Pool: The anchor investor pool for IPOs has been expanded to encompass a broader group of institutional investors, thereby enhancing the stability and appeal of public offerings.
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These measures are part of SEBI’s broader strategy to revive the Indian capital markets, which have faced challenges such as foreign fund outflows. In 2025, India recorded foreign investment outflows of $11.7 billion, driven by factors including high US tariffs and market volatility.
By streamlining entry for foreign investors and making initial public offerings more attractive, SEBI aims to reinforce India’s position as the world’s second-largest IPO market, projected to raise $20 billion in 2025.
These far-reaching reforms are likely to strengthen investor confidence, secure long-term capital, and build a more inclusive and resilient marketplace in India.