The Securities and Exchange Board of India (SEBI) has officially revised the IPO lock-in period for promoters of public limited companies, effective from August 1, 2026, as part of its ongoing effort to improve capital market liquidity while ensuring long-term commitment from promoters. Under the amended regulations, promoters will now be required to hold at least 20% of the post-issue capital for a reduced lock-in period of 12 months, down from the earlier 18-month requirement. This change applies to companies with strong fundamentals and consistent pre-IPO financial disclosures.

SEBI clarified that the revised lock-in period applies only to main-board listed IPOs that meet enhanced eligibility norms, including audited financial statements for three years, positive net worth, and a minimum promoter contribution of 20%. For other companies, including those under the Innovators Growth Platform (IGP), the existing lock-in norms of 18 to 36 months may still apply. However, any excess promoter holding beyond the mandatory 20% will now be freely tradable after six months, subject to disclosure and insider trading compliance.

To ensure transparency, companies must declare the revised lock-in schedule in their draft red herring prospectus (DRHP) and issue public notifications through stock exchanges at the time of listing. SEBI has also instructed merchant bankers and compliance officers to certify adherence to the new norms, and any violations will be subject to penalties under SEBI (Issue of Capital and Disclosure Requirements) Regulations. Market participants have welcomed the move as a balance between capital market fluidity and investor protection, allowing more flexibility for promoters while maintaining safeguards for post-IPO stability.