SEBI has, by way of Notification dated March 21, 2026, amended the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (‘ICDR Regulations’) to, inter alia, provide that in cases where lock-in of specified securities cannot be created, the depositories must, upon receipt of instructions from the issuer, record such securities as ‘non-transferable’ for the duration of the applicable lock-in period, in accordance with Regulation 17(2) of the ICDR Regulations.

To give effect to this amendment, SEBI has, by way of Circular No. HO/49/(17)2026-CFD-POD2/I/8965/2026, dated April 8, 2026 (‘Circular’), set out the mechanism for the lock-in of pledged shares under the ICDR Regulations. The Circular provides that issuers intending to undertake a public issue must, at the time of obtaining approval from their board of directors, take necessary steps to amend their Articles of Association (‘AoA’) to include suitable provisions to the effect that: (i) equity shares, if pledged, is required to be treated as locked-in for the applicable period as specified under the ICDR Regulations; (ii) in case of invocation of pledge, equity shares will continue to remain locked-in in the demat account for the balance lock-in period; and (iii) in case of release of the pledge, equity shares will be locked-in in the demat account of the pledgor for the remaining period of lock-in. Pursuant to such amendment, the issuer is required to issue appropriate notice to all existing lenders and pledgees intimating them of the changes made in the AoA. Similar notice is required to be sent at the time of filing the draft offer document with SEBI and the stock exchanges.