Sebi chief floats idea of regulated pre-IPO share trading platform
Mumbai, Aug 21, 2025
As India sees a surge in IPOs and retail participation, Sebi chairperson Tuhin Kanta Pandey's idea ignites a fresh discussion on market innovation and investor protection.
Securities and Exchange Board of India (Sebi) chairperson Tuhin Kanta Pandey on Thursday suggested exploring a regulated platform for pre-IPO share trading.
Urging intermediaries and stakeholders to weigh the idea, Pandey asked, “Can we think of an initiative on a pilot basis for a regulated venue where pre-IPO companies can choose to trade subject to certain disclosures?” The Sebi chief was speaking at the capital markets conference hosted by industry body Ficci.
While not a formal proposal, the suggestion marks a shift in public discourse around capital market innovation, especially as India’s equity markets see arecord pipeline of public listings and retail participation.
With India's IPO market booming— ₹4.3 trillion raised in FY25 and a ₹1.4 trillion expected to be mobilized in the coming months— Pandey said pre-listing information is often not enough for investors to take an informed decision.
The unlisted space, though increasingly popular, remains largely unregulated and carries significant risks for retail investors. To invest in unlisted shares, you must have a demat account to get the securities credited after the transfer. Platforms or dealers collect these stocks from a mix of shareholders—employees owning the company shares, early-stage investors looking for exit or, in some cases, from the promoters themselves.
Pandey emphasised that any regulatory shift must “provide a diverse range of opportunities depending upon risk appetite…while managing the risk.”
Mint reported recently how the unlisted space is fraught with risks for retail investors and investing in that space is not as straightforward. Despite that, there is an increasing appetite for unlisted shares.
Pandey’s remarks now place the onus on intermediaries—investment bankers, depositories, and brokerages—to respond with practical solutions. “Here are some key challenges…which are the unnecessary processes and pain points that cause avoidable friction in fundraising, disclosures and investor onboarding, and how can they be removed?” he asked.
The idea remains at the discussion stage, but signals a broader push to boost India’s capital markets and protect investors.
[Mint]
