At its meeting held on 17 December 2025, the SEBI Board approved select amendments to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR). These changes focus on resolving practical bottlenecks in IPO execution and improving the way information reaches retail investors.
1. Lock-in of Non-Promoter Shares Where Shares Are Pledged[1]:
Background:
Under ICDR, pre-issue shareholding held by non-promoters is generally required to be locked-in for six months post a company gets listed on stock exchange. In practice, issuers often faced difficulties where such shares were already pledged prior to the IPO, making technical creation of lock-in challenging.
What SEBI has approved:
SEBI has now approved a system-driven solution through depositories:
- Where lock-in cannot be created, shares will be marked as “non-transferable” for the lock-in period.
- Upon invocation or release of pledge, the depositories’ system will automatically enforce lock-in for the balance period.
Impact:
For issuers and promoters, this brings certainty and avoids last-minute compliance hurdles arising from technical lock-in issues. For lenders and non-promoter shareholders, it allows existing pledge arrangements to continue without disruption. Most importantly, for investors, it ensures that lock-in protections operate effectively in substance, not just on paper.
Overall, the change shifts lock-in compliance from manual processes to a system-driven mechanism, reducing regulatory risk while preserving investor protection.
2. Abridged Prospectus at the DRHP Stage[2]:
Background:
Although IPO disclosures are comprehensive, key information is currently scattered across lengthy offer documents. Retail investors often struggle to meaningfully engage at the early stages of the IPO process as abridged prospectus is made available to investors at RHP stage.
What SEBI has approved:
- A focused, concise and standardised abridged prospectus will now be made available at the DRHP stage itself. Similar document would also be made available at RHP stage.
- Disclosures in the abridged prospectus will be rationalised.
- With this change, SEBI may dispense with a separate offer document summary, subject to consultation with the Central Government.
- The abridged prospectus shall be hosted on the websites of merchant banker, proposed to be listed entity and stock exchanges as required under these regulations
Impact:
This move is aimed squarely at improving retail investor understanding and participation, by placing key information upfront in an accessible format.
Conclusion:
The ICDR amendments approved on 17 December 2025 reflect SEBI’s continued effort to balance ease of doing business with meaningful investor protection. By addressing real execution issues and simplifying investor-facing disclosures, SEBI has taken a practical step toward a more efficient and inclusive IPO framework.
These amendments will take effect from the date specified in SEBI’s notification, once issued.
[1] https://www.sebi.gov.in/media-and-notifications/press-releases/dec-2025/sebi-board-meeting_98433.html
[2] https://www.sebi.gov.in/media-and-notifications/press-releases/dec-2025/sebi-board-meeting_98433.html