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Sebi proposes cap on startup IPO proceeds for mergers and acquisitions

Sebi proposes cap on startup IPO proceeds for mergers and acquisitions

The Securities and Exchange Board of India (Sebi) proposed a limit on the money raised from initial public offerings (IPOs) that startups can use for mergers and acquisitions (M&As), unless takeover targets are explicitly identified beforehand.

“Raising funds for unidentified acquisitions leads to some amount of ambiguity in the IPO objects,” Sebi said in a discussion paper on Tuesday. The regulator has sought comments by stakeholders to the proposals by November 30. The paper comes in the wake of blockbuster IPOs from startups such as Zomato Paytm and Nykaa NSE . The Rs 18,300 crore Paytm IPO is India’s biggest ever.

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