SEBI ICDR amendments: what changed in 2025 for startups

ICDR stands for Issue of Capital and Disclosure Requirements. The SEBI (ICDR) Regulations 2018 are the rules that decide who can list, what a company must tell investors and how an issue is structured, including the lock-in of shares and the split between investor categories. The Securities and Exchange Board of India (SEBI) can amend them, and it did so several times in 2025.

This guide covers the changes most relevant to venture-backed companies, as of November 2026. It draws on SEBI board decisions and law-firm summaries, so exact wording and effective dates should be confirmed in the official notifications.

Because ICDR changes arrive as board decisions first and gazette notifications later, a startup planning a listing usually tracks both the SEBI board agenda and the circulars that follow. A decision approved at a board meeting can take weeks or months to become binding, and some parts need separate action by the government or the stock exchanges.

An anchor investor is a large institution that agrees to buy shares a day before an IPO opens to the public. The anchor book signals demand and adds stability. Before the change, one third of the anchor portion was reserved for domestic mutual funds.

A SEBI amendment notified on 31 October 2025, the Third Amendment of 2025 as reported, widened the reserved share to 40% of the anchor portion. According to summaries, 33% is for mutual funds and the remaining 7% is for life insurers and pension funds. Reports vary slightly on rounding. If the insurer and pension portion is not fully subscribed, the unused part goes to mutual funds. The change took effect within days of gazette publication, per advisers.

A promoter is the person or group who controls the company. Before 2025, promoters generally had to give up stock options before filing for an IPO, which hurt startup founders who had been granted options early and then were named as promoters at listing.

At its June 2025 meeting SEBI approved a relaxation, and an amendment to the SEBI share-based employee benefits regulations was reported as notified on 8 September 2025. As per law-firm summaries, founders who become promoters can keep ESOPs granted at least one year before the draft offer document is filed, if the grant came before they were designated promoters. New ESOPs for promoters after listing are still not allowed. Strictly this sits in a separate SEBI regulation, but it works together with the IPO rules.

Some pre-IPO shareholders hold shares that are pledged to lenders. Rules on lock-in can clash with pledges, because a locked-in share is hard to hand over to a lender. At its December 2025 meeting SEBI approved a framework for handling lock-in of pledged shares held by persons other than promoters, through a system-driven solution on the depositories, according to press summaries.

Details and effective dates depend on SEBI's notification and depository circulars, which this guide did not confirm. Founders and early investors with pledged shares should ask a lawyer how the framework applies before a draft is filed.

The minimum public offer is the least a company must sell to the public at listing. SEBI's September 2025 board meeting recommended a revised, size-based approach for very large issuers, with a reduced float for companies above ₹1 lakh crore of market capitalisation and a rupee floor for the very largest, and longer timelines to reach 25% public shareholding, per tax-portal summaries.

These changes sit mostly in the Securities Contracts (Regulation) Rules, which the government notifies, rather than in ICDR itself. For most startups, which are valued far below ₹1 lakh crore, the change matters less than the anchor and ESOP rules. A separate StopDown guide covers the minimum public offer rules.

Venture-backed companies often list while still loss-making and with founders who own a small share. Rules that make the anchor book deeper, keep founder ESOPs alive and clear up pledged shares can lower friction at the exact points where startup IPOs used to stall.

• Anchor book: more domestic institutions can be reserved a place, which can help price discovery.
• Founder ESOPs: founders named as promoters no longer have to surrender early options.
• Pledged shares: a defined process for lock-in lowers the risk of a stuck filing.
• Large issues: the lower float for the biggest companies mainly affects mega listings.

Anchor investors are the first public signal of demand. A deeper pool of domestic institutions can help a loss-making technology company fill its anchor book without relying on foreign funds. Life insurers and pension funds tend to invest for long periods, so some bankers see them as stabilising holders after listing, although that is an expectation, not a rule.

The anchor shares also carry their own lock-in. Under the existing rules, half of the anchor allotment is locked in for 30 days and the rest for 90 days after allotment, as per the ICDR framework at the time of writing. This matters for startups because heavy selling when the anchor lock-in ends can move the share price. A reader should check the current schedule in the offer document.

Many rules that matter most to startups were not part of these amendments. The profitability test for listing on the main board still pushes loss-making companies toward the route that requires large institutional participation. Pre-IPO lock-in of promoter and investor shares, the need for audited financial statements and the offer document disclosure norms stay in force, though some details have been adjusted over time.

A company should therefore read the 2025 changes as a set of adjustments inside an unchanged framework. The prospectus remains the document that sets out the actual terms of the issue.

Check whether a headline describes a board proposal, a notified amendment or a market practice. SEBI board approval is not the same as a notified rule, and an exchange circular may apply a rule from a later date. Also check whether the change sits in ICDR, in the SBEB regulations or in the Securities Contracts Rules, because each has a different route.

This guide is general information, not legal or financial advice. A company planning an IPO should confirm current rules with its merchant banker and legal counsel.