This is part 2 of our SEBI regulations series. The ICDR Regulations, 2018 decide how companies raise money from the public. They are among the most asked SEBI topics in SEBI Grade A and the finance papers of RBI Grade B.
Basics
Point
Detail
Full name
SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018
Replaced
ICDR Regulations, 2009 (and earlier the DIP Guidelines, 2000)
Covers
IPO, FPO, rights issue, preferential issue, QIP, bonus issue, SME issues, IDRs
Offer document
DRHP (draft, filed with SEBI) → RHP (red herring, without final price) → Prospectus (final)
Lead managers
Merchant bankers registered with SEBI (Book Running Lead Managers)
Eligibility for an IPO (Main Board)
Route
Who
Allocation rule
Regulation 6(1) (profitability route)
Net tangible assets ≥ ₹3 crore in each of the last 3 years; average operating profit ≥ ₹15 crore over the last 3 years (with operating profit in each year); net worth ≥ ₹1 crore in each of the last 3 years
QIB up to 50%, NII at least 15%, Retail at least 35%
Regulation 6(2) (QIB route)
Companies not meeting 6(1), such as loss-making start-ups
QIB at least 75%, NII up to 15%, Retail up to 10%
Promoters who are wilful defaulters or fraudulent borrowers cannot raise money through an IPO.
Investor categories
Category
Who
QIB (Qualified Institutional Buyer)
Mutual funds, banks, insurers, FPIs, pension funds, etc.
NII / HNI (Non-Institutional Investor)
Bids above ₹2 lakh; split into ₹2–10 lakh (one-third) and above ₹10 lakh (two-thirds)
RII (Retail Individual Investor)
Bids up to ₹2 lakh
Employees
Reserved portion; discount allowed
Anchor investors
QIBs bidding at least ₹10 crore, one working day before the issue opens
Anchor investors
Up to 60% of the QIB portion can go to anchors.
A part of the anchor portion is reserved for domestic institutions: earlier one-third for mutual funds; from the 2025 reforms, 40%, with life insurers and pension funds added alongside mutual funds.
Lock-in:50% of anchor shares for 30 days, the rest for 90 days from allotment.
Price band and bidding
Rule
Detail
Method
Book building (price discovered from bids) or fixed price
Price band
Cap ≤ 120% of the floor; cap must be at least 105% of the floor
Minimum application size
₹10,000–15,000
Bid period
At least 3 working days (10 days maximum)
Payment
ASBA (money blocked in the bank account) or UPI mandate (for bids up to ₹5 lakh)
Listing
T+3 working days after issue closes (mandatory from 1 December 2023)
Minimum subscription
90% of the fresh issue, otherwise money is refunded
Promoter contribution and lock-in
Rule
Detail
Minimum promoter contribution (MPC)
At least 20% of post-issue capital
Lock-in of MPC
18 months (3 years if the money is used for capital expenditure)
Lock-in of excess promoter holding
6 months (1 year if for capex)
Lock-in of pre-IPO shareholders (non-promoters)
6 months
Minimum public offer and shareholding
Rule
Detail
Minimum public shareholding (MPS)
25% (under Rule 19A of the SCRR, 1957)
Time to reach 25%
Generally 3 years from listing
2025 reforms for very large IPOs
Companies with market cap above ₹1 lakh crore can list with a smaller initial float and get 5–10 years to reach 25% MPS; companies above ₹5 lakh crore must offer at least ₹15,000 crore (as reported)
Other ways to raise capital
Method
Key point
FPO
Further public offer by a listed company
Rights issue
To existing shareholders; faster process from 2025 (approx)
Preferential issue
To selected investors; pricing formula (volume-weighted average price)
QIP
Listed companies to QIBs only; quick and no pre-filing with SEBI
Bonus issue
Free shares from reserves
SME IPO
On BSE SME / NSE Emerge; minimum application ₹2 lakh (approx); stricter rules from 2025: operating profit of at least ₹1 crore in 2 of the last 3 years (approx)
Innovators Growth Platform (IGP)
For tech/innovation start-ups; under review by a SEBI working group (2026)
Exam-ready one-liners
ICDR Regulations, 2018 replaced the 2009 version.
Under the profitability route 6(1): QIB ≤ 50%, NII ≥ 15%, Retail ≥ 35%.
Under the QIB route 6(2): QIB ≥ 75%, Retail ≤ 10%.
Retail investors bid up to ₹2 lakh; anchors bid at least ₹10 crore.
Price band cap cannot be more than 120% of the floor.
Listing must happen within T+3 days of the issue closing.
Minimum promoter contribution: 20% of post-issue capital, locked in for 18 months.
Minimum public shareholding is 25%; very large companies get longer to reach it.