Pre-IPO startups seek Sebi nod for flexibility on Esops to founders

Startups with diluted founder stakes seek Sebi's nod to issue Esops post-listing as they look to retain leadership alignment and reward long-term value creation

Pre-initial public offering (IPO) startups, where founder holdings have slipped to low levels, have sought flexibility from market regulator Securities and Exchange Board of India (Sebi) in issuing employee stock options (Esops) to them.

 

A fintech startup planning an IPO had written to Sebi in April, seeking relaxation in issuance of Esops to founders, especially post listing, said people aware of the development.

 

At present, Sebi norms do not allow issuance of Esops to promoters of a company.

 

However, the regulator recently proposed relaxation under which founders, identified as promoters or part of the promoter group, may hold or exercise