Sebi tightens screws on service provider bankers with phased net-worth necessities, liquidity norms
In a round issued right this moment, Sebi has proposed increased net-worth thresholds together with a brand new requirement to keep up liquid internet price —outlined as unencumbered money or near-cash belongings — always. For Class I service provider bankers, minimal internet price necessities will rise to Rs 25 crore by January 2027 and double to Rs 50 crore by January 2028, with corresponding liquid net-worth thresholds of Rs 6.25 crore and Rs 12.5 crore (25% of those quantities).
The Class II entities will want Rs 7.5 crore and Rs 10 crore of internet price throughout the 2 phases, respectively, once more with liquid buffers mandated at Rs 1.875 crore in phase-1 and Rs 2.5 crore in phase-2.
Underwriting publicity
The regulator has additionally capped underwriting publicity, mandating that complete underwriting obligations should not exceed 20 occasions a service provider banker’s liquid internet price, with a two-year transition window for present gamers. The MBs ought to adjust to this requirement inside two years from the efficient date, i.e. by January 02, 2028.
Common half-yearly certification by chartered accountants will probably be required to display ongoing compliance with capital, liquidity and underwriting limits, the round mentioned.The Sebi round additionally tightens operational and governance requirements. Service provider bankers will probably be required to nominate impartial compliance officers, guarantee principal officers have a minimal of 5 years’ market expertise, and stop outsourcing of core service provider banking actions past a brief transition interval. Staff and compliance officers will even have to clear specified NISM certification exams inside outlined timelines.
Income thresholds
Sebi has launched minimal income thresholds from permitted service provider banking actions — Rs 25 crore over three years for Class I entities and Rs 5 crore for Class II—with the primary evaluation slated for FY29. Failure to satisfy these benchmarks may invite cancellation of registration.
The regulatory tightening comes in opposition to the backdrop of a file main market. India emerged because the world’s second-largest fairness issuance hub in 2025, elevating over $21 billion via IPOs and different public points, underscoring SEBI’s push to make sure that intermediaries managing fund raises are well-capitalised, professionally run and able to withstanding market stress.
General, the phased strategy seeks to steadiness stability with continuity—giving present service provider bankers time to regulate, whereas setting a better bar for monetary power, governance and investor safety in an more and more vibrant IPO ecosystem
Sebi has additionally mandated that service provider bankers won’t lead handle any public problem, the place its administrators, different key managerial personnel or their relations individually or in combination maintain greater than 0.1% of the paid-up share capital or shares whose nominal worth is greater than Rs 10 lakh, whichever is decrease.
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