Mumbai, June 18 (IANS). Securities and Exchange Board of India (SEBI) may take some important decisions related to startups, delivery of public sector companies and foreign investors at its board meeting on Wednesday.
One of the major topics expected to be discussed in the meeting is whether the startup founders can continue to keep the ESOP even after their company goes public.
Currently, once the startup founder is classified as a promoter during the IPO process, they are not allowed to obtain ESOP.
However, SEBI believes that the rules are not clear whether the founders who were given the ESOPs before the promoter were given, they can use their ESOP even after the IPO.
This is relevant to many new-edge technology startups, where the founders often take ESOP instead of salary in the early days.
As these companies raise funds from investors, the shareholding of founders decreases. On this issue, SEBI issued a counseling paper on March 20, 2025, in which public opinion was sought on it.
The regulator is also considering starting a ‘cooling-off’ period of one year amidst the grant of ESOP and filing IPO letters.
SEBI believes that the ESOP can be misused just before the IPO. Another major theme in the meeting is a voluntary delisting of public sector undertakings (PSUs).
For this, SEBI can consider a new structure, which allows PSUs to exit the stock market, if the government has more than 90 percent shares of the company.
Many PSUs have low public shareholding, poor financial conditions or older business models, making their continuous listing less practical. A discussion letter on this issue was released in May this year.
SEBI can also discuss easy compliance rules for foreign portfolio investors (FPIs), which only invest in Indian government bonds (IGB).
In addition, SEBI may consider the proposal to simplify the disclosure standard for qualified institutional placement (QIP).
-IANS
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