SEBI to Overhaul Merchant Banking Rules and Discuss Diverse Capital Needs

The Securities and Exchange Board of India (SEBI) confirmed it is planning a comprehensive overhaul of its merchant banking regulations and the Issue of Capital and Disclosure Requirements (ICDR) framework, with consultation papers expected in the coming months. SEBI Chairman Tuhin Kanta Pandey noted that India's growing economy requires diverse financing solutions, including specialized capital pools for infrastructure, manufacturing, and MSMEs. The overhaul aims to streamline the primary market process and reduce compliance burdens for intermediaries.

The review of merchant banking rules seeks to ensure that regulations reflect the actual business being conducted, rather than being driven solely by IPO valuations. The discussions underscore the shift toward a more sophisticated and varied capital market ecosystem capable of meeting large-scale economic aspirations.