March 21, 2025 8:34 PM

SEBI proposes ESOP benefits for startup founders even after IPO

The Securities and Exchange Board of India (SEBI) has proposed a rule change that would allow startup founders to retain Employee Stock Option Plans (ESOPs) even after their company goes public. This move aims to support founders of new-age technology companies, who often receive ESOPs in place of cash salaries during their company’s early years. ESOPs align founders' interests with those of other shareholders. However, as startups raise investments, founders’ ownership stakes are diluted....