diff --git a/go.mod b/go.mod
index b7d6d27..ac44dea 100644
--- a/go.mod
+++ b/go.mod
@@ -9,7 +9,7 @@ require (
 	github.com/onsi/ginkgo/v2 v2.28.1
 	github.com/onsi/gomega v1.39.1
 	github.com/pkg/errors v0.9.1
-	github.com/projectsveltos/libsveltos v1.8.0
+	github.com/projectsveltos/libsveltos v1.8.1-0.20260422193357-a670bbae8df8
 	github.com/prometheus/client_golang v1.23.2
 	github.com/spf13/pflag v1.0.10
 	golang.org/x/text v0.36.0
diff --git a/go.sum b/go.sum
index ec96109..9ebc372 100644
--- a/go.sum
+++ b/go.sum
@@ -143,8 +143,8 @@ github.com/pkg/errors v0.9.1 h1:FEBLx1zS214owpjy7qsBeixbURkuhQAwrK5UwLGTwt4=
 github.com/pkg/errors v0.9.1/go.mod h1:bwawxfHBFNV+L2hUp1rHADufV3IMtnDRdf1r5NINEl0=
 github.com/pmezard/go-difflib v1.0.0 h1:4DBwDE0NGyQoBHbLQYPwSUPoCMWR5BEzIk/f1lZbAQM=
 github.com/pmezard/go-difflib v1.0.0/go.mod h1:iKH77koFhYxTK1pcRnkKkqfTogsbg7gZNVY4sRDYZ/4=
-github.com/projectsveltos/libsveltos v1.8.0 h1:yBHmiYpBbpPS6aNJOx+uOAvvBOQPkHE8cU4VKsXoAao=
-github.com/projectsveltos/libsveltos v1.8.0/go.mod h1:0K9ZLuYL/g0OonfhRVkHMyDYWuFt24EhvTtjTbUu3+Y=
+github.com/projectsveltos/libsveltos v1.8.1-0.20260422193357-a670bbae8df8 h1:XR0ebx6/L4q+GvYlmvNEhyrF5ALMMVSySgkJ5bW6iAw=
+github.com/projectsveltos/libsveltos v1.8.1-0.20260422193357-a670bbae8df8/go.mod h1:0K9ZLuYL/g0OonfhRVkHMyDYWuFt24EhvTtjTbUu3+Y=
 github.com/prometheus/client_golang v1.23.2 h1:Je96obch5RDVy3FDMndoUsjAhG5Edi49h0RJWRi/o0o=
 github.com/prometheus/client_golang v1.23.2/go.mod h1:Tb1a6LWHB3/SPIzCoaDXI4I8UHKeFTEQ1YCr+0Gyqmg=
 github.com/prometheus/client_model v0.6.2 h1:oBsgwpGs7iVziMvrGhE53c/GrLUsZdHnqNwqPLxwZyk=
diff --git a/main.go b/main.go
index 4e20ca0..7e196cb 100644
--- a/main.go
+++ b/main.go
@@ -277,15 +277,18 @@ func capiCRDHandler(gvk *schema.GroupVersionKind, action crd.ChangeType) {
 	if action == crd.Modify {
 		return
 	}
-	if gvk.Group == clusterv1.GroupVersion.Group {
+	if gvk.Group == clusterv1.GroupVersion.Group && gvk.Version == clusterv1.GroupVersion.Version {
+		setupLog.V(logs.LogInfo).Info("Initiating graceful restart due to CAPI CRD update",
+			"GVK", gvk.String(), "Action", string(action))
+
 		if killErr := syscall.Kill(syscall.Getpid(), syscall.SIGTERM); killErr != nil {
 			panic("kill -TERM failed")
 		}
 	}
 }
 
-// isCAPIInstalled returns true if CAPI is installed, false otherwise
-func isCAPIInstalled(ctx context.Context, c client.Client) (bool, error) {
+// isCAPIInstalled returns true if CAPI is installed with v1beta2 served, false otherwise
+func isCAPIInstalled(ctx context.Context, c client.Client, logger logr.Logger) (bool, error) {
 	clusterCRD := &apiextensionsv1.CustomResourceDefinition{}
 
 	err := c.Get(ctx, types.NamespacedName{Name: "clusters.cluster.x-k8s.io"}, clusterCRD)
@@ -296,7 +299,14 @@ func isCAPIInstalled(ctx context.Context, c client.Client) (bool, error) {
 		return false, err
 	}
 
-	return true, nil
+	for _, version := range clusterCRD.Spec.Versions {
+		if version.Name == clusterv1.GroupVersion.Version && version.Served {
+			return true, nil
+		}
+	}
+
+	logger.V(logs.LogInfo).Info("clusterCRD CRD present but v1beta2 not served")
+	return false, nil
 }
 
 func capiWatchers(ctx context.Context, mgr ctrl.Manager,
@@ -306,7 +316,7 @@ func capiWatchers(ctx context.Context, mgr ctrl.Manager,
 	const maxRetries = 20
 	retries := 0
 	for {
-		capiPresent, err := isCAPIInstalled(ctx, mgr.GetClient())
+		capiPresent, err := isCAPIInstalled(ctx, mgr.GetClient(), logger)
 		if err != nil {
 			if retries < maxRetries {
 				logger.Info(fmt.Sprintf("failed to verify if CAPI is present: %v", err))