Sebi starts comprehensive review of listing norms; push to bring 1,000 southern MSMEs to market

CHENNAI: The Securities and Exchange Board of India (Sebi) has begun a comprehensive overhaul of the Listing Obligations and Disclosure Requirements (LODR), chairperson Tuhin Kanta Pandey said on Monday, emphasising that the framework must reflect the realities of new-age businesses and market evolution.

“It’s a major regulation, so it will require wide consultations,” he said after an interaction with industry leaders in Chennai. “We have started the process and expect it will take four to six months for a more comprehensive review.” The discussions included addressing ambiguities and catering to contemporary promoter structures.

Pandey said industry feedback strongly called for simplified compliance. “Some compliances are being filed with multiple exchanges and depositories. If we can bring that to a single portal, the burden reduces significantly,” he noted, citing the example of a common portal created for the convenience of brokers, who were members of both exchanges.

A major area of focus was improving MSME participation in capital markets. “Many robust MSMEs are still not there in the markets,” Pandey lamented, adding southern states particularly have “a lot of potential waiting to be tapped.”

Supporting this, Thomas John Muthoot, chairman of CII Southern Region and Muthoot Fincorp, said, “We will mentor at least 1,000 MSMEs from the south over the next three years to help them access the equity market.” CII plans to run hand-holding and capacity-building programmes through its Centre for Excellence for MSMEs.

Allaying concerns over global equity bubbles, Pandey said, “There are different opinions about the US markets, especially big tech and AI. But Indian market valuations are consistent with the 10-year mean, slightly lower than one standard deviation.” Domestic equities have already seen corrections since late 2024, he pointed out.

On derivatives, he said the reforms announced since last year are meant to ensure “risk is managed and market integrity is maintained,” with the final set of measures coming into force on December 6, 2025. Longer-tenure derivative products will be encouraged to deepen hedging.

To a question on IPO pricing and startup valuations, he reaffirmed that India follows a disclosure-based regime where valuations are market-discovered through book-building. “Valuation is discovered by the market... not determined by the regulator. Our job is to ensure maximum disclosure.” Sebi is exploring summary prospectus in capsule formats to improve retail understanding.

He also stressed investor protection and awareness. “An informed investor is a protected investor,” he said, highlighting tools such as Sebi’s Saarthi app that has features to curb cyber fraud. Multilingual YouTube channels, campaigns and outreach initiatives are planned to drive participation beyond metros. “We must speak in local languages and reach tier-2, tier-3 and rural India,” he added.