The Securities and Exchange Board of India (Sebi) will review its delisting framework as part of a wider attempt to make capital market processes easier, Chairman Tuhin Kanta Pandey said at a summit on Friday. “A well-developed capital market must provide fair entry and fair exit,” he said. The move matters because delisting has long been one of the more difficult exits for controlling shareholders, with price discovery often becoming the main point of friction. The latest review places exit rules alongside Sebi’s parallel work on non-resident Indian know-your-customer (KYC) rules and startup access to long-term capital.
Why is Sebi looking again at delisting rules?
Sebi has already changed the delisting rulebook once in recent years. In 2024, the regulator permitted delisting of companies through a fixed-price route, where shareholders were offered a pre-set exit price. That route was designed as an alternative to the reverse book-building process, where the exit price is discovered through investor bids.
The earlier reform was meant to bring more certainty to both sides of a delisting offer. Sebi’s own board memorandum said the fixed-price route would give acquirers and shareholders certainty on pricing, help shareholders decide upfront whether to participate, and give acquirers more clarity in arranging funds for the offer. Business Standard had reported in 2024 that the fixed-price model allowed founders to offer to buy back shares from the public at a minimum 15 per cent premium to the fair price.
What changed for public-sector companies?
The regulator also approved a voluntary delisting framework last year for public-sector companies where controlling shareholders owned more than 90 per cent. That gave state-controlled companies with very low public float a separate exit route from the market.
The issue had been under formal examination before the framework was approved. Sebi’s consultation paper on a separate carveout for voluntary delisting of public-sector undertakings (PSUs) was published on May 6, 2025. A Sebi board memorandum later noted that, in some PSUs, the Government of India, directly or indirectly through other PSUs, already equalled or exceeded the delisting threshold of 90 per cent of total issued shares.
Why is IGP also part of this review cycle?
Pandey also said Sebi was reviewing rules for the Innovators Growth Platform (IGP) for startups to help companies better access markets for long-term capital. The platform was introduced in 2016 as the Institutional Trading Platform to help startups raise funds and list on stock exchanges, but stringent eligibility and lockin rules limited interest. It was revived as the IGP in 2018, with further relaxations in 2019 and 2021 to encourage listings.
The platform has had several rule changes because Sebi has struggled to make it useful for newage companies. Business Standard reported in 2018 that Sebi had relaxed norms for startups and proposed renaming the Institutional Trading Platform as the Innovators Growth Platform. In 2021, Sebi approved further IGP relaxations to make the platform more accessible for companies in the evolving startup ecosystem.
The larger signal
The common thread across delisting, NRI KYC rules and startup listings is procedural friction. Sebi’s current direction is not just about bringing more companies and investors into the market, but also about giving them clearer routes to restructure, exit or raise long-term capital when the public market is no longer the right fit.
With inputs from agencies
