Securities Regulation and Corporate Governance
SEBI Circular on Relaxation from the applicability of SEBI Master Circular for compliance with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 on non-compliance with the Minimum Public Shareholding (MPS) requirements
Dated: 7 April 2026
SEBI, vide circular dated 7 April 2026, has provided a measure of relief to listed entities by relaxing the non-compliance provisions relating to Minimum Public Shareholding (‘MPS’) requirements under the SEBI Master Circular (‘Master Circular’) dated 11 July 2023. The relaxation applies to listed entities not complying with MPS requirements, including consequential actions such as levy of fines, freezing of promoter shareholding, and other related measures.
Accordingly, and in view of the geopolitical tensions arising in the Middle East, SEBI has granted a one-time relaxation to the penal provisions under the Master Circular for the period starting from 1 April 2026 to 30 September 2026. Further, any penal actions initiated by the stock exchanges or depositories against such listed entities for non-compliance with MPS requirements during the period from April 1, 2026 till date may be withdrawn.
To this extent the stock exchanges are advised to disseminate this information on their website and make any bye-laws, rules or regulations to put this into effect.
SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations 2026
Dated: 16 March 2026
The SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2026, dated 16 March 2026, introduce key changes to public issue processes, including the concept of a draft abridged prospectus. The amendments also revise key disclosure requirements and the lock-in mechanism for specified securities.
Firstly, Regulation 17 introduces a new sub-section (2) to address situations where dematerialised lock-in of specified securities is not technically feasible. The amendment requires depositories to record such securities as non-transferable for the applicable lock-in period upon receipt of instructions from the issuer.
Further, Regulations 25(2), 59(9A), 123(2), and 246(3), which govern public issues, introduce an important shift in disclosure requirements. Under the amended framework, issuers are now required to prepare and submit a draft abridged prospectus alongside the draft offer document. In effect, this means that the summary document, i.e., the abridged prospectus, must now be filed at the pre-filing stage, enhancing transparency early in the offering process.
More in terms of filing obligations and the broader aim at increasing investor transparency, Regulations 26, 59C, 124 and 247 clarifies that now the draft and final abridged prospectus must be hosted on the SEBI, issuer, lead manager, and all relevant stock exchange websites.
Annexure I of Schedule VI, Part E, also sees a change. Annexure I is now completely substituted, replacing the earlier framework with a revised format comprising 12 prescribed items. The updated Annexure introduces several key disclosures, including (but not limited to) the promoter profile, objects of the issue, the weighted average cost of acquisition of shares for promoters and selling shareholders, and a summary of restated consolidated financial statements for the past three years. Collectively, these enhancements are aimed at reducing information asymmetry and enabling more informed investment decisions.
Other minor yet notable changes include the introduction of two additional sub-clauses in Schedule VI, Part A, requiring the abridged prospectus to include a summary of contingent liabilities and related party transactions. Additionally, a QR code has been introduced in place of attaching a separate file to application forms, enabling investors to seamlessly access relevant documents in a more efficient and user-friendly manner.
Securities Appellate Tribunal in the matter of Tanzania Bottling Company S.A. v SEBI
Dated: 9 January 2026
On 2 July 2025, SEBI dismissed the complaint of Tanzania Bottling Company S.A. (‘TBC’) on account of ‘sufficient’ disclosure made by Varun Beverages Limited (‘VBL’) with respect with respect to the termination of a share purchase agreement.
The cause of action arose in late 2024 when VBL announced a $154.5 million deal to acquire SBC Tanzania from TBC. While the initial acquisition was clearly disclosed to the stock exchanges, the transaction later failed due to unmet conditions. VBL did not make a clear and standalone disclosure of termination and instead made only a brief disclosure in Note 9 of its quarterly financial results. As a result, the Tanzanian Revenue Authority proceeded on the assumption that the sale had been completed and imposed a $4.26 million tax liability on TBC.
While SEBI dismissed TBC’s complaint, saying that the disclosure in financial statements was sufficient, on appeal to the Securities Appellate Tribunal (‘SAT’), the decision was overturned.
SAT held that VBL’s disclosure was legally insufficient, noting that burying price-sensitive news in small print within financial notes is “camouflaged” disclosure, which is effectively no disclosure at all. Emphasizing that investors and authorities rely on transparent data, the SAT allowed the appeal and ordered SEBI to re-examine the case and ensure VBL makes a proper, standalone disclosure.
SEBI (Share Based Employee Benefits and Sweat Equity) (Second Amendment) Regulations, 2025
Dated: 3 December 2025
SEBI has, vide circular dated 3 December 2025, issued SEBI (Share Based Employee Benefits and Sweat Equity) (Second Amendment) Regulations, 2025 amending the 2021 framework. The key change relates to valuation standards.
The definition of “valuer” under Regulation 2 has been aligned with section 247 of the Companies Act, 2013.
Regulation 34(1) has been amended to mandate that all fresh valuations must be conducted exclusively by independent registered valuers. Merchant bankers are now permitted only to complete valuation assignments that were already underway prior to the amendment, within a transition period of nine months.
SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2025
Dated: 3 December 2025
SEBI has, vide notification dated December 3, 2025, issued the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2025 under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
The amendment replaces the earlier provisions which permitted the acquirer and the merchant banker to the offer to determine the valuation of the shares of the listed target company with a uniform requirement that going forward all valuations required under the regulations shall be undertaken only by registered valuers (as defined under Section 247 of the Companies Act, 2013).
Accordingly, references to valuation by the merchant banker or independent chartered accountant has been substituted with “registered valuer” in the regulations.
SEBI (Foreign Portfolio Investors) (Second Amendment) Regulations, 2025
Dated: 1 December 2025
SEBI, vide notification dated 1 December 2025, issued SEBI (Foreign Portfolio Investors (“FPI”)) (Second Amendment) Regulations, 2025, introduces a new framework titled “Single Window Automatic and Generalised Access for Trusted Foreign Investor (SWAGAT-FI)” under the FPI Regulations, 2019.
Regulation 2 is amended to add a new definition for Single Window Automatic and Generalized Access for Trusted Foreign Investor (“SWAGAT-FI”) which is a new category which covers government and government related investors as well as public retail funds.
Further, Regulation 4 (c) has been amended to allow SEBI registered mutual funds to be part of FPI applicants, include retail schemes under alternative investment funds and replace references to “sponsor or manager” with “fund management entity or it’s associate”, in order to align the FPI framework with the International Financial Services Centres Authority (Fund Management) Regulations.
Additionally, the contribution thresholds under Regulation 4(c)(iii) have been revised, replacing earlier dollar-linked limits with a requirement of 10% of corpus for alternate investment funds and up to 10% of assets under management for retail schemes.
Further, Regulation 7, Sub-Regulation (6) read with second schedule have been amended to require SWAGAT-FI entities to pay registration fees in advance for each block of ten years, whereas earlier fees were paid periodically under a uniform structure applicable to all FPIs.
SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations 2025
Dated: 18 November 2025
The SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations, 2025, dated 18 November 2025, expands the scope of related party transactions (“RPT”) and introduce a turnover-linked materiality framework through the insertion of Schedule XII, which replaces the earlier uniform threshold of “₹1,000 crore or 10% of consolidated turnover” with a graded, size-sensitive system, prescribing specific monetary limits corresponding to three turnover bands of the listed entity. The amendments require that any RPT exceeding INR 1 crore, even where the listed entity is not a party but the subsidiary of a listed entity is a party, obtain prior audit committee approval if the transaction exceeds the lower of 10% of the subsidiary’s annual standalone turnover or the materiality threshold for the listed entity as specified in Schedule XII of the regulations.
Additionally, omnibus approvals granted by shareholders for material RPTs in an annual general meeting shall remain valid until the next annual general meeting held within timelines prescribed under Section 96 of the Companies Act, 2013, whereas approvals granted in other meetings shall be valid for a maximum of one year.
SEBI Interim Order pertaining to investigation on Insider Trading (IEX matter)
Dated: 15 October 2025
In July 2025, the Central Electricity Regulatory Commission (“CERC”) made announcements regarding the proposed market coupling, following which the share price of the Indian Energy Exchange (“IEX“) fell severely. In light of the same, SEBI initiated a suo-motu investigation and subsequently received a complaint alleging insider trading.
The IEX acted as the price setter in the energy market by virtue of its higher liquidity. However, market coupling or the centralisation of bids in the Indian power markets was set to take away its dominant position and attribute leverage to alternative power exchanges. Post the announcement of market coupling, the IEX scrip fell down by 29.58%.
Prior to CERC’s announcement, a committee was formed in order to oversee the implementation of a shadow pilot program for the market coupling. It was noted that during the 5th meeting, Grid India was directed to prepare timelines for implementing the market coupling. Given that the mechanism for price discovery was bound to change post the announcement, and that the same would have a substantial impact on the market, the said information was deemed Unpublished Price Sensitive Information (“UPSI“) by SEBI.
There are 8 individuals who are under SEBI’s scrutiny for having engaged in insider trading with 3 individuals belonging to the Economics division of the CERC which is where the UPSI originated, 4 individuals forming part of the Singh family with Bhoovan Singh (“Mr. Singh”) engaging and advising basis the UPSI, 4 individuals forming part of the Kumar family, and the last individual being the astrologer of Mr. Singh.
Mr. Singh had been in contact with the CERC Officials listed in the order, especially with the Chief of the CERC Economics Division (“Official 1”). The families are interrelated by virtue of being family friends and overlapping directors across First Mile Technologies Pvt. Ltd. and GNA Energy Pvt. Ltd. Furthermore, Mr. Singh had access to multiple trading accounts and email accounts of the individuals investigated.
On investigation, SEBI found out dissemination of undisclosed information amongst the investigated individuals with Mr. Singh directing trades for other people and attempting to increase outreach for CERC’s announcements via media outlets so as to amplify the market reaction. Similarly, Official 1 was actively engaged in disclosing information to other insiders and advising individuals on how to engage in trades.
During the investigation, SEBI looked at the trading activity, volume and the profits made. It noted that prior to the analysis period, none of the individuals investigated had significant trades in the concerned scrip, it is only when the CERC order was about to be released that these individuals entered into such trades and raked significant profits.
For any information to qualify as UPSI, it must: (a) be directly or indirectly related to a company; (b) not be available to the general public, and (c) on becoming available, is likely to have an impact on the securities market. Given that the information regarding the CERC announcement was bound to have significant impact on the market, corroborated by the dip in IEX prices post announcement, along with the fact that said information was not available to the general public before the announcement, SEBI noted that the above criteria was fulfilled and information regarding the announcement qualified as UPSI.
Subsequently, SEBI delved into the question of whether the investigated individuals could be deemed “Insiders” as per the SEBI (Prohibition of Insider Trading) Regulations, 2015. Per the Regulations, anyone having access to UPSI shall qualify as an Insider. Since SEBI had already procured evidence and corroborated the fact that the investigated individuals were privy to information about the CERC announcement prior to its disclosure, the investigated individuals were deemed as Insiders.
On SEBI’s analysis of the trading patterns of the investigated individuals wherein they had traded large sums of money without any prior history of trading, it was evident that the trades in question were done in consideration of the UPSI acquired by the investigated individuals.
Lastly, SEBI noted that in light of the illegal advantage availed by the investigated individuals and the large sums of public money accrued by illegal means, there is a need for an interim order so as to prevent the said funds from going out of regulatory reach. In furtherance of the same, SEBI has passed this interim order to the effect that investigated individuals are to transfer the illegal profits to a fixed deposit under a lien in SEBI’s favour; are restricted from any trading activity; banks and depositories are instructed to freeze related accounts and transfers; investigated individuals are required to submit a comprehensive list of assets and seek SEBI’s permission prior to alienating any of them. Most of these restrictions shall fall away once the investigated individuals create fixed deposits amounting to the illegal profits.
Adjudication Order in respect of 8 entities in the matter of trading activities of certain entities in the scrip of Max Heights Infrastructure Ltd
Dated: 22 September 2025
On September 22, 2025, SEBI issued an adjudication order regarding manipulative trading in the scrip of Max Heights Infrastructure Ltd. (“MHIL”) during an investigation period from 31 October 2022 to 15 March 2023. The case involved eight Noticees. The core ground that SEBI alleged was that Noticee 1, in connivance with Noticees 2 to 8, introduced a misleading stock split proposal to inflate the volume and price of the company’s stock in order to enable profitable exit at higher prices. This would have ensured a profitable exit for the Noticees 2 to 8 but would have negatively affected retail investors.
Through its investigations, SEBI discovered a dense network of personal and professional relations among the Noticees. Call data records showed numerous phone calls between Noticee 1 and the other notices. SEBI also conducted a geo-location analysis and had identified 33 common meeting points. Noticee 1 and various other Noticees shared the same cellular tower location.
The entire scheme revolved around a stock split initiated by Noticee 1 on 22 November 2022. The reasoning for the same was provided to be an intent to expand investor base. Despite promoter oppositions and dissent from the managing director, the resolution was approved by three independent directors (including Noticee 1). However, shareholders rejected the resolution, with approximately 99.99% of votes cast against the split. SEBI through its investigations discovered that Noticee 1 had no idea about basic concepts with respect to a share split. Thus, concluded that this share split was not entirely Noticee 1’s idea and that he had been used as a vehicle by other connected Noticees.
Expectedly, the market reacted to these announcements. After MHIL’s initial board meeting, the stock price of the company rose by nearly 5%. Upon the MHIL’s board approval, there was a sustained upward trend, with multiple increases in traded quantities relative to pre‑announcement levels and a rise in price from levels below Rs. 11 (in early November 2022) to peaks close to Rs. 99.99 by mid‑March 2023. This is precisely when the group struck and started to sell substantial quantities of their MHIL shares. Crucially, none of these Noticees purchased a shares after the split was proposed, focusing entirely on liquidating their positions at the inflated prices.
SEBI identified a clear financial motive for this exit, as Noticees 2 and 4 needed to repay loans availed from an individual named Rakesh Pahwa. Bank records showed significant fund transfers to Pahwa’s company during the exact period the Noticees were offloading their MHIL shares. While proceedings against Noticee 6 were disposed of because the company had been dissolved, SEBI found the remaining Noticees had violated fraudulent and unfair trade practice regulations. Consequently, SEBI imposed a joint and several monetary penalties of INR 10 lakhs on Noticees 1, 2, 3, 4, 5, 7, and 8.
For more information contact:
Sneha Nagvekar
Partner & Practice Head – Public M&A & Securities Regulations
sneha.nagvekar@veritaslegal.in
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