“The process for IPO-bound companies whose pre-IPO shares are pledged is being streamlined. The proposed framework will ensure that lock-in requirements are automatically enforced, even if a pledge is invoked or released, thereby preventing listing delay,” Pandey said at the 12th State Bank of India Banking & Economics Conclave.
A consultation paper on the proposed changes will be out soon, he said.
Under the current system, shares pledged by promoters or investors before an IPO often require manual verification and coordination between depositories, lenders, and the issuer to ensure that regulatory lock-ins, periods during which these shares cannot be sold, remain intact. The proposed system would make these lock-ins digitally automatic, closing any gaps that arise when a pledged share changes hands or is released close to the IPO.
The framework, when implemented, is expected to increase transparency in the IPO process and reduce administrative delays. The move also aligns with Sebi’s broader push toward system-driven compliance and greater use of technology in the capital markets.
Sebi is also working to make IPO documents more accessible and useful for investors. Pandey said the summary section of the draft red herring prospectus (DRHP), the key document that companies file before going public, will be rationalized and made available separately from the full offer document.
Currently, the summary is embedded within several pages of disclosures, making it harder for investors, especially retail participants, to easily understand the key details of an issue. By providing a standalone, simplified version, the regulator hopes to encourage better-informed investor feedback during the public comment phase.
“For IPO-bound companies, the existing contents of the offer document summary will be further rationalized. This summary will also be made available separately to investors to encourage informed feedback,” the chairperson said. This initiative comes at a time when India’s primary market is witnessing a surge in public offerings, with a robust pipeline of IPOs lined up across sectors.
Commodities push
Sebi plans to work with the Reserve Bank of India (RBI) to enable regulated institutional access to the commodities market, paving the way for participation by banks, insurance companies and pension funds, entities currently restricted from direct involvement.
“We will work with the RBI towards a regulatory framework to enable prudential institutional access to the commodities market, where banks, insurance companies, and pensions could also participate,” Pandey said.
He noted that India’s commodities market remains underdeveloped relative to its potential, particularly in industrial products, and emphasized the need for education and collaboration among exchanges, market participants, and industry players to develop a wider range of products.
“The commodities market is not as it should be. We have lots of potential in industrial products. A lot of education is required as industry has to come together along with exchanges to develop those products,” the Sebi chief said.
Sebi will work with commodity exchanges and market participants to expand the number of tradable products, said Pandey.
