 "Markets regulator Sebi directs phased rollout of merchant banking overhaul")
India's markets regulator SEBI on Friday proposed a phased rollout of a new net worth requirement for existing merchant bankers, stepping up risk management of the country's booming initial public offering market.
The proposed timeline is part of SEBI's overhaul of rules announced in December for bankers managing fund raises and deals, requiring them to maintain a liquid net worth of at least 25% of the minimum net worth requirement at all times.
The regulator said on Friday that merchant bankers managing public offerings, fund raises or acting as lead managers must have a minimum net worth of 250 million rupees ($2.77 million) before January 2027.
It added that the requirement will double to 500 million rupees by January 2028.
Bankers acting only as advisers will need to maintain a net worth of 75 million rupees by January 2027, which will rise to 100 million rupees thereafter, SEBI said.
Liquid net worth is the amount of money an entity holds in the form of cash or cash equivalent instruments that can be easily liquidated.
A merchant banking license in India permits institutions to manage and advise on public issues. It also allows underwriting as part of the issues as well as managing and advising on international offerings of debt and equity, among others.
India was the world's second-largest primary equity issuance market in 2025, raising $21.6 billion through 352 deals as of December 18, according to data compiled by LSEG.
The country has also surpassed the record $20.5 billion raised last year through the primary market.
($1 = 90.1790 Indian rupees)
(Reporting by Komal Salecha in Bengaluru and Jayshree P Upadhyay in Mumbai; Editing by Shreya Biswas)
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