SEBI has issued a consultation paper proposing amendments to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, aimed at improving ease of doing business and enhancing retail investor participation in public issues. The first proposal seeks to simplify compliance with lock-in requirements for pre-IPO shares, especially those under pledge, by introducing an enabling framework that allows depositories to treat pledged shares as “non-transferable” during the lock-in period. The second proposal reviews the need for the abridged prospectus, suggesting its replacement with a concise “Offer Document Summary” to improve investor understanding and accessibility of key disclosures. This summary would be hosted online by issuers, SEBI, exchanges, and lead managers. The proposed changes intend to streamline IPO processes, increase retail engagement, and ensure that investors rely on accurate, summarized information rather than unverified sources. Public comments on these proposals are invited until December 4, 2025.
Securities And Exchange Board of India
Nov 13, 2025 | Reports : Reports for Public Comments
Consultation Paper on amendments to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, with the objective of enhancing ease of doing business and increasing the participation of retail investors in public issue
1. Objective
1.1. This consultation paper seeks comments / suggestions from the public on the following proposals relating to amendments to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, (‘ICDR Regulations’) with the objective of enhancing ease of doing business and increasing the participation of retail investors in public issue:
1.1.1. Review of the requirement of lock-in of shares at the time of Initial Public Offer (‘IPO’).
1.1.2. Review of the requirement of Abridged Prospectus.
Part A – Review of the requirement of lock-in of shares at the time of IPO
2. Background
2.1. The ICDR Regulations require that the pre-issue capital held by promoters and persons other than the promoters to be locked-in for the period as specified under the Regulations. The existing system of the depositories does not allow lock-in of certain shares such as those under pledge. This creates challenges for issuer at the time of IPO.
3. Present Provisions in ICDR
3.1. As per Regulation 17, the entire pre-issue capital held by persons other than the promoters, except shares held by certain specified categories of shareholders, shall be locked-in for a period of six months from the date of allotment in the IPO.
4. Need for review
4.1. SEBI has received representations from the market participants highlighting challenges faced by the issuers in complying with the lock-in requirements pertaining to pre-issue capital held by persons other than the promoters, particularly in cases where pledges have been created prior to the IPO.
5. Rationale
5.1. Considering that the shares of an issuer are freely transferable, the existing shareholders may create pledge over such shares at any time prior to such shares being subjected to lock-in. This often creates practical challenges for issuers at the time of IPO, as they may face difficulties in complying with the lock-in requirements pertaining to pre-issue capital held by persons other than the promoters. In case of certain issuers, where the number of shareholders is large or such shareholders are untraceable or unwilling to cooperate, the challenges are further compounded due to the prescribed timelines in the IPO process.
5.2. The existing framework requires modification to address situations where depositories are unable to create lock-in on pledged shares. The proposed framework will enhance ease of doing business, while safeguarding the interest of lenders.
6. Proposed Framework
6.1. The ICDR Regulations provide an enabling framework for pledge of locked-in shares held by the promoters. Further, in cases where shares held by the promoters are under pledge prior to the IPO, the promoters, with the consent of concerned lenders, are able to ensure the release of pledge for the purpose of initiating lock-in as required under ICDR Regulations.
6.2. It is proposed to introduce an enabling framework to address the issue of lock-in of pledged shares held by persons other than the promoters. This framework will include (a) Appropriate enabling provisions in the ICDR Regulations, (b) Incorporation of suitable clauses in the Articles of Association (‘AoA’) of the issuer, and (c) Mandating the issuer to provide necessary intimations to the concerned lenders / pledgees.
6.3. The issuer intending to undertake a public issue shall, at the time of seeking approval from its Board of Directors, take necessary steps to amend its AoA to incorporate suitable provisions to enable the following:
6.3.1. Equity shares, if pledged, shall be treated as locked-in for the applicable period as specified under ICDR.
6.3.2. In case of invocation of pledge, equity shares shall be locked-in, in the account of the pledgee for the balance period of lock-in.
6.3.3. In case of release of pledge, equity shares shall be locked-in, in the account of pledger for the balance period of lock-in.
6.4. Pursuant to the amendments in the AoA, the issuer will issue appropriate notice to all existing lenders / pledgees informing them of the changes made to the AoA. Similar notice may again be sent at the time of filing of the draft offer document with SEBI. Further, the aforesaid provisions of the AoA will be prominently disclosed in the Draft Red Herring Prospectus (‘DRHP’) and Red Herring Prospectus (‘RHP’) (collectively referred to as ‘offer document’). Such disclosure will clearly state that any shares received by lenders / pledgees, upon invocation of the pledge will remain under lock-in for the balance period as required under the ICDR Regulations.
6.5. The depositories through their system will ensure that, subsequent to the invocation or release of pledge, the shares in the account of the beneficiary (pledger or pledgee) will automatically be locked-in for the balance period, as required under the ICDR Regulations.
6.6. The proposal has been discussed with select Non-Banking Financial Companies (‘NBFCs’) engaged in the business of extending loans against unlisted shares. These NBFCs have expressed their concurrence.
7. Proposal
7.1. Proposal 1: In order to facilitate implementation of the proposed framework by the depositories and enable the pledged shares to be treated as locked-in for the purpose of compliance, the following proviso to Regulation 17 of ICDR may be inserted:
“Provided further that, in cases where lock-in of the specified securities cannot be created, the depositories, upon receipt of instructions from the issuer, shall record such securities as ‘non-transferable’ for the duration of the applicable lock-in period.”
Query 1: Whether you agree with the proposal to amend the ICDR Regulations to include the above proviso to enable the pledged shares to be treated as locked-in for the purpose of compliance of Regulation 17 of ICDR.
7.2. The proposal is based on the recommendations of the Primary Markets Advisory Committee of SEBI and internal discussions.
7.3. A comparison of the existing and proposed provisions of the ICDR is given at
Part B – Review of the requirement of Abridged Prospectus
8. Background
8.1. SEBI has consistently undertaken measures to strengthen the disclosure framework in the capital markets with the objective of ensuring that information disclosed to investors is timely, relevant and meaningful, thereby facilitating informed decision making by investors.
8.2. The ICDR Regulations mandate comprehensive disclosures in the offer document. Further, the draft offer document is required to be placed in the public domain for at least 21 days for comments.
8.3. The ICDR Regulations require that each bid application in relation to an issue shall be accompanied by a copy of abridged prospectus. Thus, there is a requirement of abridged prospectus at the time of RHP but not at the time of DRHP.
9. Present Provisions in ICDR
9.1. Part A of Schedule VI of ICDR prescribes the disclosures to be made in the offer document / letter of offer, including Offer Document Summary.
9.2. The regulation 25, 59(C), 123 and 246 of ICDR prescribes the requirement of filing of offer document with SEBI.
9.3. The regulation 34, 131 and 255 of ICDR prescribes that each bid application for an issue be accompanied by a copy of abridged prospectus.
9.4. Part E of Schedule VI of ICDR, specifies the disclosures to be made in an abridged prospectus.
10. Need for review
10.1. The offer document is often voluminous and complex, which may not be easy to comprehend, particularly for retail investors. This complexity can make it difficult for the investors to effectively analyze the offer document and gather relevant information for informed decision making.
10.2. The voluminous nature of the offer document may deter retail investors from reviewing such documents, thereby leading to lack of engagement and participation in the IPO process, including providing comments on the disclosures.
11. Rationale
11.1. The offer document typically comprises of detailed disclosures across various sections such as industry overview, business, financials, pending litigations, management discussion, offer procedure and articles of association. These sections often contain detailed legal, financial and technical information. The offer document provides comprehensive disclosures pertaining to all material aspects of the pubic issue and serves as the primary document for regulatory review and public scrutiny. However, due to its size and complexity, key disclosures relating to the public issue such as major risk factors, financial highlights, objects of the issue and key performance indicators are dispersed across multiple sections. Enhanced focus on key disclosures can increase investor understanding. Mandating a focused, concise and standardized summary of offer document can enhance investor comprehension, improve information accessibility and may lead to increase in the engagement of retail investors in the IPO process.
11.2. Further, it has been observed that the retail investors often rely on secondary and unregulated sources of information such as grey market trends and unverified social media for making investment decisions. As information provided by these sources are not accurate, the same may not be a desirable input to the investors and reliance on such information is not appropriate for the orderly growth of the capital markets. The availability of focused and summarized disclosures from the issuer can reduce reliance on such sources.
11.3. Despite the mandated 21-day period for public comments under Regulation 26(1) of the ICDR Regulations, as well as similar provisions for pre-filled offer documents (updated Draft Red Herring Prospectus-I), Further Public Offers (‘FPOs’) and SME IPOs, public comments on draft offer document remain negligible. This lack of participation is inconsistent with the regulatory intent, which seeks to encourage scrutiny of the offer document by both institutional and retail investors.
11.4. In view of the above, the disclosures in the Offer Document Summary may be rationalized to make it a focused and concise document. Further, the Summary may also be made available separately from the offer document to increase the engagement of the retail investors.
11.5. With the availability of Offer Document Summary, the requirement to prepare an abridged prospectus may be dispensed with. Which will rationalize documentation requirements and streamlining the public issue process, thereby enhancing the ease of doing business for issuers.
12. Proposal
12.1. Proposal 2: The Regulations 25(2), 59(C), 123(2) and 246, pertaining to Main Board IPO, Pre-filled IPO, FPO and SME IPO respectively, of the ICDR Regulations may be suitably amended to prescribe that the Offer Document Summary will be submitted along with the draft offer document and offer document; and will be hosted on the website of the issuer, the Board, stock exchanges where specified securities are proposed to be listed and lead manager(s) associated with the issue.
Query 2: Whether you agree with the proposal to amend ICDR Regulations to make Offer Document Summary available separately from the draft offer document and offer document and hosted on the website of the issuer, the Board, stock exchanges where specified securities are proposed to be listed and lead manager(s) associated with the issue.
12.2. Proposal 3: The format of Offer Document Summary as prescribed under Item (4) of Part A of Schedule VI of ICDR may be rationalized as per the amendments proposed at Annexure -II.
Query 3: Whether you agree with the proposal to amend the ICDR Regulations to rationalize the disclosures made in the Offer Document Summary.
12.3. Proposal 4: With the availability of Offer Document Summary, the Regulations 34, 131, 255 and Part E of Schedule VI of the ICDR Regulations may be amended to dispense with the requirement of abridged prospectus.
Query 4: With the availability of the Offer Document Summary, whether you agree with the proposal to amend the ICDR Regulations to dispense with the requirement of abridged prospectus.
12.4. The above proposals are based on the recommendations of the Primary Markets Advisory Committee of SEBI and internal discussions.
12.5. A comparison of the existing and proposed provisions of the ICDR is given at Annexure – I.
13. Submission of Public Comments:
13.1. Considering the implications of the aforementioned matters on the market participants including issuer companies and investors, public comments are invited on the proposals mentioned at para 7 and 12 above.
13.2. Through Online web-based form – The comments / suggestions should be submitted latest by December 4, 2025, through the following link:
https://www.sebi.gov.in/sebiweb/publiccommentv2/PublicCommentAction.do?d oPublicComments=yes
13.3. Through Email – In case of any technical issue in submitting your comment through web based public comments form, you may send your comments through e-mail to consultationcfd@sebi.gov.in with the subject “Consultation Paper on amendments to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, with the objective of enhancing ease of doing business and increasing the participation of retail investors in public issue”.
Issued on: November 13, 2025
