SEBI ICDR Review: Working Group to Look at Mainboard IPO and FPO Rules (October 19, 2026)

The SEBI ICDR review is moving from the small end of the market to the big one. Mint reported on October 19, 2026 that the Securities and Exchange Board of India plans to set up a sub-group of its Primary Market Advisory Committee (PMAC) to re-examine the rules for mainboard IPOs and follow-on public offers (FPOs). A SEBI spokesperson confirmed the plan to the paper. It comes just five days after the regulator put out a sweeping consultation paper on SME IPOs.

What the SEBI ICDR review will cover

ICDR is short for the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, the rulebook for any company raising money from the public. According to Mint’s report, the sub-group will look at Chapter II, Chapter IIA and Chapter IV. Chapter II is the mainboard IPO chapter. It sets out who is eligible to list, how issues are priced, how much promoters must contribute and how long their shares stay locked in. Chapter IV covers FPOs, the route listed companies use to raise fresh money from the public.

The mandate, as quoted from SEBI’s email to PMAC members, is broad: examine the existing framework and identify areas that may need “review, clarification, rationalization or modification”. Nothing has been proposed yet.

How we got here

Per Mint, PMAC decided to form the group at a meeting on August 12, 2026. SEBI emailed committee members on October 12 asking for volunteers, with nominations open until the evening of October 13. The email also says the sub-group’s constitution is subject to approval by the competent authority, so its final shape could still change.

What might it look at? Sidharth Kumar, principal associate at BTG Advaya and a former SEBI officer, told Mint the regulator may revisit the mainboard listing thresholds, such as how many years a company must have been profitable and the safeguards around valuations. He also said SEBI may check whether the changes it made a few years ago to help new-age companies list have actually worked. That is one practitioner’s reading, though, not a SEBI proposal.

The SME paper sets the tone

If you want a sense of how far SEBI is willing to go, read its October 14, 2026 consultation paper on SME IPOs. It proposes deciding SME eligibility by post-issue market capitalisation instead of paid-up capital. Issuers worth up to ₹1,000 crore after the issue would have to list only on the SME platform. Those between ₹1,000 crore and ₹4,000 crore could also choose it. Anyone above ₹4,000 crore would have to go to the mainboard.

The profit test gets tougher too. Today an SME issuer needs an operating profit of ₹1 crore in at least two of the three preceding financial years. The paper proposes an average operating profit of at least ₹3 crore a year over the preceding three years, based on restated consolidated financial statements. Comments are open until November 4, 2026.

The paper also shows how big the segment has become. As of July 31, 2026, 1,496 entities had listed on SME platforms since inception, 365 of them had migrated to the mainboard, SME IPOs had raised ₹40,222 crore in total, and the combined market capitalisation stood at ₹4,70,984 crore, using NSE and BSE data. We covered how that migration works in our explainer on SME IPO migration to the main board.

What it means for IPO investors

For now, nothing changes for anyone applying to an IPO this week. But the direction is clear. SEBI is redrawing the line between the SME and mainboard segments from both sides, and any change to Chapter II would affect the eligibility, pricing and lock-in rules that every large issue follows. If you track new listings, two things are worth watching: who ends up on the sub-group, and whether a consultation paper follows. Our guide to IPO investing in India and our piece on how an IPO price band works explain the basics that these rules govern.

Disclaimer: This article is for information only and is not investment advice or a recommendation to buy or sell any security. Details are from Mint’s October 19, 2026 report and SEBI’s SME consultation paper, both linked above. Please consult a SEBI-registered investment adviser before making any investment decision.