SEBI Announces Major IPO Reforms to Enhance Transparency & Investor Protection

SEBI at its recent Board Meeting has approved a set of important changes to IPO regulations aimed at making public offers more transparent, easier for investors to understand and structurally cleaner especially for retail investors.

What’s Changing?

1. Early, Easy to Read IPO Summaries

Under the new framework, SEBI will require a standardised abridged prospectus to be published at the draft offer document stage itself instead of only at the final offer stage. This concise summary will highlight key business details, financials, risks and issue structure, helping investors quickly grasp the essentials without wading through hundreds of pages.

2. Tighter Lock-in Enforcement for Pre-IPO Shares

To address past challenges where enforcement of lock-in norms was weak (especially when pre-IPO shares were pledged), SEBI will now have depositories mark such shares as ‘non-transferable’ for the lock-in period. This ensures that even if pledged shares are invoked or released, the remaining lock-in applies automatically, improving supply discipline post-listing.

3. Reduced Complexity & Better Access

SEBI is also rationalising disclosures to avoid duplication and information overload. The abridged prospectus will be hosted on exchanges and issuer websites, making it easier for investors to access and compare key data.