Capital market regulator Sebi on Thursday hinted at introducing a regulated platform for pre-IPO (initial public offer) trading, putting a curb on the unregulated grey-market.
At present, the pre-IPO market, which is unregulated, allows investors the opportunity to buy and sell shares before they are officially listed on the stock exchange. If many investors want to buy shares in a particular IPO, the price in the grey market will go up. The regulator had earlier expressed concern over the lack of transparency in pre-IPO trading and has been exploring ways to make the process more regulated.
“With a booming IPO market, investors are eagerly anticipating what’s next. Yet pre-listing information is often not enough for investors to make an investment decision. 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?” Sebi chief Tuhin Kanta Pandey said at a capital markets conference organised by Ficci on Thursday.
This new platform may permit investors to trade shares in a regulated environment in the three days between IPO allotment and listing. Also, this initiative may replace the existing unregulated grey market, which currently operates during this period.
As of June 30, 2025, a total of 45 IPOs across the mainboard and SME segments have raised ₹15,464 crore. In the corresponding period previous year, the total number of IPOs was 74 with an aggregate amount raised of ₹18,381 crore. In August, another 11 companies have launched their initial share sales, with a few more in the pipeline for the next week.
Pandey said that the capital market has scaled rapidly and a total of ₹4.3 lakh crore was raised in FY25 from the primary market through IPOs, follow-on public offers, rights issues, preferential issues and qualified institutional placements. He said that there is a strong fundraising pipeline of ₹1.40 lakh crore going forward.
“At Sebi, we have worked to shorten IPO timelines, to enable safeguards such as blocking of funds and direct payout, and to establish digital processes that reduce cost and time for everyone. The UPI Valid sub-system for Sebi-registered intermediaries will soon be rolled out as a verified payment channel to protect investors in the securities market from cyber fraud. These steps matter to first-time investors and to institutions that manage risk,” Pandey said.
AI role
The Sebi chief also said that artificial intelligence has the potential to unlock new forms of customer engagement, enable alternative approaches to risk assessments and monitoring, fraud detection and financial inclusion. At the same time, increased adoption of AI could amplify existing challenges to data protection and cybersecurity, among others.
“We have to think of AI as an assist, not a substitute for judgement. Sebi’s proposed guiding principles for AI/ML (machine learning) emphasise a tiered approach, data and cyber controls and clear accountability. RBI’s free AI committee report also complements this,” he said.