Sebi relaxes Esop norms for IPO-bound startup founders

In a major relief to startup founders looking to go public, Sebi on Wednesday approved a proposal to allow them to retain employee stock options (ESOPs) granted at least one year prior to filing preliminary IPO papers.

Under the existing regulations, promoters are ineligible to hold or be granted share-based benefits, including ESOPs. If they hold such share-based benefits at the time of filing of draft red herring prospectus (DRHP), they have been required to liquidate such benefits prior to the IPO.

This provision has been found to be impacting…