India’s securities regulator AIims to exempt eligible listed companies from appointing merchant bankers for certain small private debt issues, potentially reducing costs and increasing speed of fundraising amid market constraints.
India’s markets regulator has proposed easing a key requirement for small private debt issues by listed companies, in a move it says could lower compliance costs and make fundraising faster. The Securities and Exchange Board of India wants to exempt eligible issuers from having to appoint a merchant banker for certain debt securities and non-convertible redeemable preference shares sold through private placement, where the face value is ₹10,000.
At present, issuers making such placements must appoint at least one merchant banker. SEBI said that requirement can add cost and delay at a time when pricing for debt can shift quickly, making speed more important. It also pointed to the limited pool of merchant bankers active in the debt market as a further constraint on development.
The proposed relief would not apply universally. According to SEBI, only listed issuers that meet four conditions would qualify: they must be regulated by a recognised Indian financial-sector authority such as SEBI, the Reserve Bank of India, the Insurance Regulatory and Development Authority of India or the Pension Fund Regulatory and Development Authority; they must have been listed on a recognised stock exchange for at least a year; they must have no pending penalties or fines linked to listing-related non-compliance; and they must not have defaulted in the past three financial years or the current one on a range of obligations, including deposits, interest, preference share redemptions, debt repayment or dividends.
The issuer would also need to provide an auditor’s certificate to the stock exchange confirming that it has not defaulted. SEBI has invited public comments on the draft circular until 17 September 2026.
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