NSE IPO Soon? SEBI Accepts In-Principle Settlement Application In Unfair Market Access Case

While addressing AIBI (Association of Investment Bankers of India) Annual Convention 2025, Sebi Chief Tuhin Kanta Pandey said that India's capital markets are playing a growing role in funding economic expansion, with the market capitalisation-to-GDP ratio rising from 69% in FY16 to over 130% today.

In the first nine months of the financial year, 311 IPOs raised Rs 1.7 trillion, while overall equity mobilisation crossed Rs 3.8 trillion. Debt issuances added Rs 6.8 trillion, and issuers could potentially raise another Rs 1.5 trillion going ahead. India now ranks first globally in the number of IPOs and third in terms of IPO value, according to SEBI chief.

Investor participation has surged, with the number of investors rising from 43 million in FY20 to 137 million. Unique mutual fund investors have grown to over 59 million, with mutual fund savings recording a 24% CAGR between FY21 and FY25.

"As the economy expands, our securities markets are playing a larger role in funding growth," SEBI chief said.

However, the regulator flagged recurring gaps in IPO disclosures that hurt transparency and delay fund-raising. "We continue to observe disclosure gaps that reduce transparency and investor understanding," the SEBI chief said, adding that weak disclosures also lead to repeated regulatory queries.

SEBI has identified risk factors, valuation rationale, objects of the issue, and use of proceeds as key areas needing sharper disclosures. Capital structure disclosures must clearly explain past fund-raising, preferential allotments, and changes in control, especially close to the IPO.

The regulator also called for clearer business model disclosures, including revenue and cost drivers. "The Management Discussion and Analysis should move beyond narration and explain the internal and external drivers of performance," the SEBI chief said.

Inspections have shown that due diligence is not always independent. "Projections, especially for working capital and capex, must be independently verified, and backup papers maintained for all material statements," he said. Even basic checks such as site visits should be supported by proper reports, photographs, geo-tagging, and time-stamps.

On the regulatory front, SEBI has revamped merchant banking rules to ease compliance, removing the requirement to hive off non-regulated activities into separate legal entities and allowing such activities to be conducted at arm's length through separate business units.

Looking ahead, the regulator said India's markets must be ready to provide patient capital for long-gestation sectors such as biotechnology and clean energy. "Our markets must be ready to provide patient capital for long-gestation innovation," he said . "India's capital markets have never been more resilient. The task now is to sustain this momentum and fuel the next phase of national growth," he added.