Corporate Quarterly Milestones (January-March 2026)

The Securities and Exchange Board of India (SEBI) amended its Issue of Capital and Disclosure Requirements Regulations, 2018 (ICDR), to streamline requirements for public issues. The key amendments are:

• Eased lock-in compliance for encumbered securities: The ICDR mandates a six-month lock-in period on the pre-issue capital held by non-promoters post an initial public offering (IPO). However, where such securities were already encumbered (E.g., pledged in favour of lenders) prior to the IPO, depositories could not create a lock-in as that would require the encumbrance to be released first, typically necessitating third-party consent. SEBI has addressed this practical challenge by mandating depositories to record securities as “non-transferable” when a lock-in cannot be created due to existing encumbrances, thereby ensuring compliance without requiring prior release of the encumbrance.
• Requirement of draft abridged prospectus with draft offer document: An IPO issuer must now file a draft abridged prospectus with the draft offer document. Earlier, such a prospectus was required to be filed at the stage of filing the final offer document with SEBI. The amendments also revise the format of the abridged prospectus to require clearer and more detailed disclosures regarding the company’s business, industry, and financials.

SEBI has also recognised the challenges faced in public issues amid the market volatility created by geopolitical tensions in the Middle East. Companies proposing to list must initiate the public issue within 12 months from the date on which SEBI provides its observations on the draft offer documents (extendable to 18 months if the draft offer document was shared with SEBI on a confidential basis) (SEBI Observations). To provide issuers with flexibility to time their public issues more effectively once the market conditions stabilise and prevent the withdrawal of public issues that would otherwise have lapsed due to timing constraints, SEBI has, on 7 April 2026, provided a one-time extension for companies whose SEBI observations are set to expire between 1 April 2026 and 30 September 2026. For such companies, the validity of the SEBI observations has been extended up to 30 September 2026.

In March 2026, the minimum public shareholding (MPS) requirements applicable to listed companies under the Securities Contract (Regulation) Rules, 1957 (SCRR), were revised (Amendment Rules) to address practical challenges faced by large issuers, improve market absorption capacity, and facilitate capital formation while maintaining long-term public shareholding discipline.

The Amendment Rules introduce a hybrid value plus percentage model, replacing the earlier purely percentage-based approach, reduce upfront dilution requirements for high-value IPOs, and extend the timelines for achieving MPS compliance.

Similar to the temporary relaxation of timelines for public issues, SEBI has also provided a one-time relaxation from compliance with MPS requirements for certain listed entities by suspending penal action for non-compliance where the due date falls between 1 April 2026 and 30 September 2026. This temporary relief is intended to account for prevailing market volatility and provide additional time for compliance under more stable conditions.

To read our detailed update on the Amendment Rules, click here.

The Corporate Laws (Amendment) Bill, 2026 (Bill), introduced in the Indian parliament in March 2026, proposes significant reforms to the Companies Act, 2013 (Companies Act). The key changes include:

• Recognition of other forms of employee compensation instruments: The Bill proposes to amend the provisions of the Companies Act governing employee stock options (ESOP) to also recognise schemes linked to the value of the share capital of the company, such as Stock Appreciation Rights (SAR), in addition to ESOPs.

  Currently, the Companies Act recognises only schemes that confer upon employees of a company the right to purchase or subscribe to the company’s shares at a future date and at a pre-determined price. However, the Bill proposes to also recognise schemes such as SARs, where the scheme is linked to the value of the share capital of the company, but is settled in cash as against stock.

• Changes to buy-back requirements: Companies are currently permitted to undertake buy-backs only up to 25% of their paid-up share capital and free reserves, and only once in a financial year. The Bill proposes to change these requirements for specific classes of companies, although it does not mention the exact details of such changes, or which classes of companies these changes would apply to.
• Increased restrictions and disqualification grounds for independent directors: The Bill seeks to strengthen the independence criteria of independent directors by proposing to extend the cooling-off restriction (applicable after two consecutive terms) to cover association (in any capacity, directly or indirectly) with any group company (including holding, subsidiary, or associate companies). It also proposes to broaden the grounds for director disqualification to include recent professional associations with the company or its group entities, such as auditors, valuers, or insolvency professionals, and introduce the concept of a “fit and proper person” standard for different classes of companies.
• Reduced approval thresholds for fast-track mergers: The Bill proposes to reduce the following thresholds for fast-track mergers:
  • approval of members present and voting from 90% to 75%; and
  • creditor approval from nine-tenths in value to three-fourths in value.

  These changes can significantly ease group restructurings and reverse flips, through mergers and pre-IPO consolidations.

• Increased thresholds for applicability of Corporate Social Responsibility: Corporate Social Responsibility (CSR) currently applies only to companies that have:
  • a net-worth of at least INR 500 crore (Net-Worth Trigger); or
  • a turnover of at least INR 1,000 crore (Turnover Trigger); or
  • net profit of at least INR 5 crore (Net-Profit Trigger), in the preceding financial year.

  The Bill proposes to double the Net-Profit Trigger to INR 10 Crore, while retaining the existing Net-Worth Trigger and Turnover Trigger. Further, it proposes to extend the time period for transferring unspent CSR funds from 30 days from the end of the financial year to 90 days.

• Increased role of the National Financial Reporting Authority: The Bill proposes to significantly strengthen the role of the National Financial Reporting Authority (NFRA), transforming it into a more autonomous and robust audit regulator. The Bill introduces a detailed statutory framework granting NFRA independent rule-making powers and a wider enforcement toolkit, including advisories, warnings, censures, and mandatory training, in addition to existing powers of penalty and debarment. It also provides that non-compliance with NFRA’s orders may attract criminal liability.

Overall, the Bill attempts to provide more flexibility for corporates. Measures such as recognition of alternative compensation instruments, relaxed buy-back norms, revised CSR thresholds, and reduced approval requirements for fast-track mergers reduce compliance burdens and align the law with market realities. At the same time, tighter independence criteria and expanded disqualification grounds for directors, along with increased powers of NFRA will likely strengthen governance and oversight. While several provisions remain subject to detailed rules, the overall framework signals a move toward balancing ease of doing business with accountability, enabling more efficient corporate structuring without diluting governance standards.