The Securities and Exchange Board of India (Sebi) may soon relax rules for listing of startups in India including giving promoters the flexibility to categorise themselves as ordinary shareholders, exempting them from the mandatory three-year lock-in period, The Economic Times reported.

At present, all shares of pre-IPO investors in a company are locked in for one year. Further, 20 percent of the shares held by the promoter group have a three-year lock-in period. Sebi plans to reduce it to six months for all pre-IPO shareholders, which would give private equity firms to get a timely exit, the report said.

If implemented, startups like Ola, SoftBank backed Paytm, Flipkart may benefit and they may even consider listing, the report said, adding that the regulator might also relieve them of fiduciary responsibilities of a promoter.

The proposals discussed by Sebi appointed committee on startup listing will be part of the final recommendation report which is to be published next month, ET reported, citing sources familiar with the development.