Securities and Exchange Board of India (Sebi) tightens merchant banker capital and liquidity norms

Key facts

• Sebi mandates Category I merchant bankers to raise minimum net worth to Rs 25 crore by January 2027 and Rs 50 crore by January 2028.
• Category I entities must hold liquid net worth of Rs 6.25 crore in phase-1 and Rs 12.5 crore in phase-2.
• Category II merchant bankers require net worth of Rs 7.5 crore and Rs 10 crore across the two phases with liquid buffers of Rs 1.875 crore and Rs 2.5 crore.
• Underwriting obligations capped at 20 times liquid net worth with compliance deadline of January 02, 2028.
• Half-yearly chartered accountant certification mandated for capital, liquidity and underwriting compliance.
• Minimum revenue thresholds set at Rs 25 crore over three years for Category I and Rs 5 crore for Category II with first assessment in FY29.
• India raised over $21 billion through IPOs and public issues in 2025 becoming the world’s second-largest equity issuance hub.