SEBI IGP rules eased: 6 key changes for startups

What the Innovators Growth Platform is meant to do

The Innovators Growth Platform (IGP) is a specialised stock exchange segment created to help startups and new-age technology companies raise capital in public markets. It operates under SEBI’s Issue of Capital and Disclosure Requirements (ICDR) Regulations, 2018. The design premise is simple: many startups may not meet the profitability, net tangible asset, or minimum net worth expectations that typically shape eligibility for a mainboard IPO. The IGP framework attempts to bridge that gap by offering a simpler listing route with lower entry barriers.

A key feature of IGP is its reliance on an institutional-investor-backed validation mechanism. Instead of profitability filters, the platform leans more on the presence and commitment of eligible investors as a signal of quality and governance. In practice, this is intended to expand the set of Indian companies that can list locally, rather than seeking capital markets access abroad.

Why SEBI moved to relax IGP norms now

SEBI’s board approved a set of changes aimed at making the platform “more accessible to companies in view of the evolving startup ecosystem.” The regulator’s objective, as stated after the board meeting, is to boost startup listings and improve the overall attractiveness of the IGP route.

The context is important. Profitability remains a key criterion for mainboard listings, and SEBI has positioned IGP as an alternative route for entrepreneurial ventures. Even so, the platform has not seen listings so far, according to the information provided. That lack of traction has brought sharper focus on whether the original IGP conditions were too restrictive for the very companies it was designed to serve.

Eligibility basics and how IGP differs from mainboard IPOs

The article notes that, for IGP consideration, there is no requirement of profitability, net tangible assets, or minimum net worth, unlike the mainboard IPO process. This is the core differentiation, and it is why the platform exists as a separate exchange venue for startups.

At the same time, IGP eligibility and listing conditions historically placed heavy emphasis on investor holding requirements and other process constraints. SEBI’s latest changes focus on those elements, tightening the linkage between early-stage institutional participation and smoother entry into public markets.

Change 1: Pre-issue capital holding period cut to one year

One of the most material relaxations is on the holding period for pre-issue capital. Earlier, a company seeking to list on IGP needed 25% of its pre-issue capital to be held by eligible investors for two years. SEBI has eased this by reducing the requirement to one year.

This change directly affects how quickly startups can prepare for an IGP listing after institutional participation is in place. It also improves flexibility for companies whose cap tables evolve rapidly due to funding rounds, secondary transactions, and structured instruments.

Change 2: ‘Accredited Investors’ renamed for IGP

SEBI has renamed the term ‘Accredited Investors’ for IGP purposes. The new term is ‘Innovators Growth Platform Investors’. The change is more than cosmetic because it clarifies the investor category in the specific context of IGP and its listing framework.

The rename is presented as part of a broader effort to tailor the IGP ecosystem and create a more distinct identity for startup-focused listings within India’s public markets structure.

Change 3: Full 25% pre-issue holding now counts for eligibility

Earlier, the pre-issue shareholding of such investors for meeting eligibility was considered for only 10%. SEBI has now increased this, and the entire 25% will be considered for meeting eligibility norms.

This adjustment strengthens the role of eligible investors in the listing filter. It also reduces ambiguity on how much of the investor holding is recognised for qualification, which can simplify compliance interpretation for issuers and their advisers.

Change 4: Discretionary allotment allowed up to 60% with 30-day lock-in

Under the earlier framework, an issuer company could not make discretionary allotment as per the present norms described in the article. SEBI has eased this by allowing discretionary allotment up to 60% of the issue, with a lock-in period of 30 days on such shares.

The article describes this as discretionary allocation prior to issue opening for subscription, and specifically to eligible investors. The policy intent is to align IGP more closely with established public issuance practices, while still using a short lock-in to prevent immediate churn.

Change 5: SVR/DVR structures permitted on IGP

SEBI has also allowed companies that have issued Superior Voting Rights (SVR) equity shares, or differential voting rights (DVR), to promoters or founders to list under the IGP framework.

This is significant for many new-age companies that use founder-friendly voting structures. Under the revised approach described, such structures are not automatically excluded from the IGP path, which could widen the pool of potential issuers.

Change 6: Open-offer trigger relaxed to 49%, with a control caveat

SEBI has relaxed the stipulation for triggering open offers for companies listed under the IGP platform from 25% to 49%. The article also adds an important qualifier: irrespective of acquisition or holding of shares or voting rights, any change in control directly or indirectly will trigger an open offer.

This balances two objectives. It raises the numerical threshold to accommodate fundraising and secondary activity without routinely triggering open offers, while still protecting shareholders in situations where control changes hands.

Eased migration to mainboard and revised delisting framework

SEBI has eased norms for migrating from IGP to the main board (NSE and BSE). For a company not satisfying conditions of profitability, net assets, and net worth, the earlier requirement was 75% of capital held by qualified institutional buyers (QIBs) on the date of application for migration. This has now been reduced to 50%.

On delisting, the regulator has relaxed requirements for startups seeking to go private. Delisting will be considered successful if the acquirer or promoter shareholding, along with the shares tendered and accepted, reaches 75% of the total issued shares of that class, and at least 50% of the public shareholding is tendered and accepted. The reverse book-building mechanism will not be applicable. For computing the offer price, the floor price will be determined in terms of takeover regulations, along with a delisting premium as justified by the acquirer or promoter.

Snapshot table: What changed in SEBI’s IGP framework

Market impact: What this means for startup fundraising and exits

The changes lower the time and structural frictions that could have delayed IGP listings. Cutting the investor holding period from two years to one year directly reduces the lead time for eligibility planning. Allowing discretionary allotment up to 60% introduces more certainty in allocation for eligible investors, while the 30-day lock-in provides a limited stabilisation window.

The open-offer threshold shift to 49% is also aimed at easing capital raising and stake reshuffling without frequent mandatory open offer obligations, while preserving shareholder protection when control changes. Meanwhile, migration rules from IGP to the mainboard have been made less demanding for companies that do not meet profitability and related thresholds, lowering the QIB holding requirement to 50%.

Why the changes matter for the IGP’s credibility

IGP was designed to give technology-oriented companies and startups with early-stage investors an opportunity to list under a simpler framework than the mainboard. But the platform has not seen listings yet, as stated. SEBI’s amendments are therefore a practical attempt to make the route usable, without removing investor-linked checks that function as a substitute for profitability filters.

The renaming of investor categories and the change in how pre-issue holdings are counted also signal a more deliberate, startup-specific framework rather than a borrowed template. The next test is whether these relaxations translate into actual issuances and a sustainable pipeline of credible companies choosing local public markets.

Conclusion

SEBI’s board-approved changes significantly rework how startups qualify for and operate on the Innovators Growth Platform, from pre-issue holding timelines to allotment flexibility, takeover triggers, migration, and delisting. The regulator has framed the revisions as a response to the evolving startup ecosystem and the need to make IGP more accessible. The key next milestone will be whether issuers and eligible investors use the simplified framework to bring the first listings to a platform that currently has none.