Thursday, 19 June, 2025

SEBI Relaxes ESOP Norms, Lets IPO-Bound Startup Founders Retain Pre-DRHP Stock Options

SEBI’s board approved a key change allowing startup founders to hold employee stock options granted at least one year before filing their Draft Red Herring Prospectus, even post-listing—ending the requirement to liquidate ESOPs before an IPO. The regulator also simplified Qualified Institutional Placement documents by cutting redundant disclosures, harmonized KYC norms with RBI, eased foreign fund investments in government securities, and introduced a voluntary delisting carve-out for PSUs.