Why Smart Dealmakers Can Now Treat SEBI as a Counterparty in M&A

The most valuable line in a term sheet today isn’t the price or the escrow arrangement, but a note that the regulator didn’t object when the structure was still just a sketch on a whiteboard. SEBI’s Informal Guidance Scheme 2025 makes that note possible, if used wisely.

The real change is not that dealmakers can ask the Securities and Exchange Board of India questions. It is that regulatory interpretation itself can be turned into strategic advantage by investment bankers with savoir-faire. Those who think like SEBI will price risk more intelligently and negotiate from a position of foresight. Crucially, the scope of eligibility for regulatory guidance has been expanded to include market infrastructure institutions, pooled investment vehicles, acquirers under takeover regulations, and entities preparing for listings.

For instance, a promoter planning a staggered acquisition edging toward the open offer threshold, or a company weighing a delisting when public float is fragmented, can now send SEBI a tightly framed query that tests the structure before committing serious capital. The scheme charges a ₹50,000 fee per application, sets an indicative 60-day window for responses, and allows applicants to seek up to 90 days of confidentiality, with scope for redaction, before publication. These practical details matter because they turn informal guidance from abstract comfort into a planning tool that can shape pricing, sequencing, and even the decision to proceed.

Against that backdrop, the traditional choreography in Indian dealmaking is familiar. Deal teams draft, often relying on off-the-record wisdom from retired SEBI officials; they circulate, file, make exploratory calls, and hope the regulator’s response is mild rather than reconstructive. Now, a sharply framed application that sets out material facts, cites the specific regulatory provisions at issue, and asks a pointed question can reveal likely friction points even before selling the idea internally. The catch is simple: if a banker cannot articulate the regulatory uncertainty, it reveals an incomplete understanding of the rule they are trying to navigate.

This shift will alter internal power dynamics. In many firms, the loudest voices in a deal discussion are the rainmakers and relationship managers. Under this regime, the most valuable seat in the room may be occupied by the person who understands how SEBI staff interpret “control”, “persons acting in concert”, beneficial ownership, creeping-acquisition thresholds, voting rights, or nuances of promoter reclassification. The edge will lie with those who can read regulatory subtext, not just regulatory text.

SEBI has stated that a no-action letter is guidance, not absolution. If there is any deviation from the declared facts or if material details are omitted, SEBI can withdraw the letter. This is precisely why the mechanism will separate serious dealmakers from opportunists. Those seeking rubber-stamp approvals will find the scheme too exacting, while those who treat regulation as an interpretative framework rather than a box-ticking exercise will see its value. As guidance letters accumulate, they will form a body of informal regulatory reference that shapes behaviour even though it binds no one, helping market norms evolve from today’s informal comfort regime to tomorrow’s unwritten standards.

Banks and funds that study these letters can begin building proprietary interpretive maps by identifying not only what SEBI prohibits, but also what it tolerates in practice. Over time, this regulatory literacy becomes a compounding advantage.

Boutique firms with tighter communication loops and sharper legal instincts can stress-test creative structures earlier and walk into negotiations with a quiet regulatory advantage over larger institutions, which are often slow, siloed, and constrained by internal risk filters.

That contrast becomes sharper once you see how the new informal guidance scheme has changed the sequencing of regulatory risk. Instead of waiting to hear from SEBI after committing to a structure, smart investment bankers can treat the regulator as a silent counterparty at the drawing-board stage rather than a late-stage examiner.

From SEBI’s perspective, this mechanism front-loads transparency. Instead of intervening after a problematic deal hits the market, the regulator sees intentions early. This shifts its role from reactive policing to proactive shaping of market behaviour without weakening enforcement muscle.

The fundamental cultural shift will be behavioural. India’s capital markets are maturing into an ecosystem where regulatory interpretation becomes part of the value chain. Dealmakers who previously treated SEBI as a black box will discover that asking the regulator the right question is sometimes as valuable as securing the right financing partner.

What remains to be seen is who will use this mechanism to understand the spirit of regulation, and who will use it to probe its outer edges. The winners will be those who recognise that the future of dealmaking does not lie in ever more creative financial engineering, but in aligning innovation with the regulator’s cognitive model. In modern dealmaking, the ultimate constraint on ambition is regulatory clarity. Those who seek it early will own the future of M&A in India.