- Effective 1 January 2026, the flat ₹5 crore net worth rule was replaced with a two‑tier, risk‑based capital adequacy model.
- Category 1 MBs: ₹50 crore net worth, eligible for all activities including Main‑board IPOs, with ₹12.5 crore cumulative revenue (3 years) and 25% liquid net worth.
- Category 2 MBs: ₹10 crore net worth, barred from Main‑board IPOs, with ₹2.5 crore cumulative revenue (3 years) and 25% liquid net worth.
- Underwriting obligations capped at 20x liquid net worth to prevent over‑leveraging and ensure cash availability.
- Merchant bankers can now perform non‑regulated, fee‑based advisory activities within the same entity.
- ESOP and sweat equity valuations shifted to Independent Registered Valuers, enhancing transparency and investor protection.
Question:
Q1. From when will SEBI’s revised risk-based capital adequacy norms for merchant bankers come into effect?
a) 3 December 2025
b) 13 December 2025
c) 1 January 2026
d) 1 April 2026
Answer: c) SEBI announced that the revised two-tier, risk-based capital adequacy framework will be effective from 1 January 2026.
