SEBI restricts selling ESOP shares for ex-staff till one year after IPO

The Securities and Exchange Board of India (SEBI) today said that shares owned by ex-employees, allotted through ESOPs (Employee Stock Options), cannot be sold for a period of one year pursuant to an IPO by the company.

SEBI said that if someone ceases to be an employee of a company on the date of allotment of shares pursuant to the IPO, the shares held by such a person cannot be exempted from the one year lock-in provision. SEBI said “In other words, such shares held by ex-employees have to be locked in...”