In a major relief for startup founders planning to go public, the Securities and Exchange Board of India (SEBI) announced on Tuesday that it has amended its rules to allow promoters to retain employee stock options (ESOPs) granted at least one year before filing IPO papers.
According to the official notification, employees who are identified as promoters or part of the promoter group in the draft IPO documents can now continue to hold or exercise ESOPs, Stock Appreciation Rights (SAR), or any similar benefit, provided these were granted at least one year before filing.
Until now, SEBI’s rules did not allow promoters to hold ESOPs or similar share-based benefits.
Startup executives categorized as promoters found the procedure challenging because founders who possessed such benefits had to liquidate them before submitting draft documents for an IPO.
The modification, according to the regulator, is intended to address issues that founders encounter during the listing process, particularly when businesses use reverse flipping to relocate their headquarters from overseas to India.
It is anticipated that this action will facilitate the initial public offering (IPO) process for businesses and give founders who were granted ESOPs before launching their public listing ambitions more freedom.
Due to clearing firms’ declaration of settlement vacations on September 5 and 8, 2025, the market regulator earlier this week updated the settlement schedules for the equity and derivatives divisions.
SEBI has announced that on September 9 (Tuesday), the cash and Securities Lending and Borrowing Mechanism (SLBM) segment settlement would take place for the trade days of September 4 (Thursday) and September 5 (Friday).
The market watchdog said on Monday that the settlement for trades made on September 8 (Monday) and September 9 (Tuesday) would be finalized on September 10 (Wednesday).