India Eases IPO and Investment Rules to Attract Foreign Capital

India’s market regulator SEBI has unveiled measures to ease foreign investor access and support large IPOs amid heavy outflows this year.

Foreign investors have pulled USD 11.7 billion from equities and debt in 2025, pressured by U.S.

tariffs, weak earnings, and high valuations, Reuters said.

To lure capital, SEBI launched a single-window clearance system for overseas funds, including sovereign-backed and retail investors, while easing IPO rules.

Large firms with a post-IPO market cap above INR 5 trillion must now sell only 2.5% of shares, down from 5%, with the deadline for meeting the 25% public float extended to five years.

Companies exceeding INR 1 trillion in market cap may get up to 10 years.

Disclosure requirements for small related-party transactions were also simplified.

SEBI said the reforms will help absorb large IPOs and bolster India’s booming listings market, which is expected to raise about USD 20 billion in 2025.