SEBI raises FPI disclosure bar to ₹50,000 crore

What SEBI changed in the disclosure framework

The Securities and Exchange Board of India (SEBI) has amended its disclosure framework for foreign portfolio investors (FPIs) by revising the size threshold that triggers enhanced ownership and control disclosures. Under the updated circular, FPIs that cross the revised limit must provide granular, full look-through details of all entities with ownership, economic interest, or control. The change is effective immediately, according to SEBI. The amendment updates an earlier requirement that had become more widely applicable as India’s equity markets expanded. SEBI’s stated objective is to recalibrate compliance obligations to current market conditions while maintaining oversight of the biggest investors.

The threshold is doubled from ₹25,000 crore to ₹50,000 crore

Earlier, the enhanced disclosure obligation applied when an FPI, either individually or along with its investor group (as defined under Regulation 22(3) of the SEBI FPI Regulations), held more than ₹25,000 crore of equity assets under management (AUM) in Indian markets. SEBI has now doubled this size-based trigger to ₹50,000 crore of equity AUM. This means fewer FPIs will fall under the mandatory granular disclosure net based on AUM alone. SEBI linked the revision to the increase in market size and activity. Cash equity trading volumes, SEBI noted, have more than doubled between FY 2022-23 and FY 2024-25.

Immediate effect and alignment across connected rules

SEBI said the revised framework comes into force with immediate effect. The regulator also clarified that the change is intended to ensure consistency across connected disclosure requirements, including those that apply to offshore investment routes linked to FPIs. In practice, the updated limit is meant to operate as a single, consistent trigger across the relevant parts of SEBI’s disclosure architecture. For market participants, the “immediate effect” wording typically means compliance checklists, internal thresholds, and reporting triggers need to be updated without a transition window.

ODI subscribers also see the same higher trigger

The amendment is not limited to direct FPIs. It also affects Offshore Derivative Instruments (ODIs) subscribers, who were subject to similar disclosure expectations through a separate SEBI circular dated December 17, 2024. By shifting the key size trigger to ₹50,000 crore for ODI-linked disclosures as well, SEBI is aligning expectations across instruments used for indirect participation in Indian equities. The revised structure signals that the most granular, look-through disclosures are intended primarily for the largest exposures.

What parts of the FPI Master Circular were modified

SEBI’s circular specifies changes to the FPI Master Circular to reflect the higher limit. The modified references include:

• Sub-para (xiii)(b) of Para 1 of Part C
• Sub-para (ix)(b) of Para 4 of Part D

These edits are designed to “capture” the new ₹50,000 crore threshold wherever the earlier limit appeared, so that the disclosure regime remains internally consistent for FPIs and ODI subscribers.

Background: the August 2023 disclosure push and concentration trigger

In August 2023, SEBI had directed FPIs to make granular disclosures in two broad situations. One trigger was size: an overall holding in Indian equity markets above ₹25,000 crore. The second trigger related to concentration: FPIs holding over 50% of their equity AUM in a single corporate group. The March 2025 update changes the size trigger to ₹50,000 crore, but SEBI has retained the concentration-based requirement. This keeps additional scrutiny on large, concentrated bets in specific corporate groups even if the overall AUM threshold is not crossed.

SEBI has also noted in the broader framework that certain FPIs may be exempt from the additional disclosure requirements, subject to conditions. These include FPIs with broad-based, pooled structures with a widespread investor base, and those with ownership interest by the government or government-related investors.

Legal basis and stated rationale

SEBI said the amendment is issued under its powers in Section 11(1) of the SEBI Act, 1992, along with connected provisions of the SEBI (Foreign Portfolio Investors) Regulations, 2019. The circular references Regulations 22(1), 22(6), 22(7), and 44. In explaining why the threshold was being raised, SEBI pointed to market growth and the doubling in cash equity market trading volumes between FY 2022-23 and FY 2024-25. The regulator’s stated intent remains investor protection and the regulation and orderly growth of India’s securities market.

What FPIs and market intermediaries need to change

For FPIs, the practical effect is that many mid-to-large investors that were previously above ₹25,000 crore may now fall below the revised ₹50,000 crore trigger. Under the earlier cut-off, affected FPIs had to provide detailed information including identification of natural persons who are beneficial owners, entities with common ownership, economic interests and control rights across structures, and offshore fund networks with overlapping management. With the higher threshold, the number of FPIs required to file such granular, full look-through details is expected to reduce.

Designated Depository Participants (DDPs) are also impacted because they handle onboarding and ongoing compliance. With fewer entities falling under enhanced disclosure requirements, the quantum of verification, documentation, and disclosure-related services may reduce. At the same time, DDPs must update internal checklists and client advisories to reflect the new ₹50,000 crore trigger, including group-level calculations where relevant.

Concerns raised: transparency, Press Note 3, and structuring risk

The threshold increase has also prompted concerns around reduced regulatory visibility. Critics argue that easing disclosure obligations can diminish transparency, weaken risk detection mechanisms, and dilute safeguards against circumvention of Press Note 3 (DPIIT, April 17, 2020). Press Note 3 tightened scrutiny of investments from countries sharing land borders with India, particularly where indirect control or influence may be a concern. The concern articulated is that a higher threshold could allow sophisticated structures with significant assets, but below ₹50,000 crore, to avoid the most granular look-through scrutiny.

Another risk highlighted is “asset fragmentation”, where investors split exposures across multiple funds to remain below disclosure thresholds. Such structuring could make it harder to detect coordinated strategies, concentration risks, or opaque related-party arrangements until after market impact is visible. SEBI’s original August 2023 circular was positioned as a response to these kinds of risks, especially for large or concentrated positions.

Key numbers and triggers at a glance

Why the change matters for Indian equities

SEBI’s revision reflects a trade-off between compliance load and supervisory depth. From a market facilitation perspective, fewer FPIs may need to undertake time-consuming, cross-jurisdiction disclosure exercises purely due to scale, which could support participation by mid-sized global institutions. Indian listed companies could benefit indirectly if smoother compliance encourages sustained FPI engagement and liquidity.

But the shift also concentrates the most granular transparency requirements among only the largest investors. With the size trigger doubled, the oversight net tightens at the top end and loosens for a wider middle segment. The continued 50% single corporate group concentration trigger is a key counterbalance, but the debate remains whether market size growth alone justifies reduced look-through visibility for large, but sub-threshold, equity exposures.

Conclusion

SEBI has doubled the equity AUM threshold for granular beneficial ownership disclosures by FPIs and ODI subscribers from ₹25,000 crore to ₹50,000 crore, with immediate effect, citing a sharp expansion in cash equity market volumes. The amended framework updates the FPI Master Circular references to embed the new limit while retaining the 50% single corporate group concentration trigger. The change is expected to reduce compliance requirements for a broader set of FPIs, even as it raises questions about transparency and monitoring of significant, but sub-threshold, foreign equity exposures. The market will now watch how DDPs operationalise the revised trigger and how SEBI balances facilitation with surveillance under the updated regime.