The Securities and Exchange Board of India (Sebi) has proposed simplifying the lengthy and complex initial public offer (IPO) prospectus to make it easier for retail investors to understand and access key company information.

In a consultation paper released on Thursday, Sebi suggested that disclosures in IPO offer documents be streamlined and a concise summary be introduced to improve investor engagement and informed decision-making.

The proposed “Offer Document Summary” would provide a clear snapshot of essential details such as a company’s business model, financial highlights, key risks and the objectives of the issue. It would be made available on the websites of the issuer, Sebi, the stock exchanges and the lead managers.

Sebi said that with the introduction of this summary, the current requirement for an abridged prospectus could be eliminated, reducing duplication and easing documentation for issuers. This move aims to simplify the IPO process and enhance the ease of doing business.

The regulator highlighted that existing offer documents are often “voluminous and complex”, which discourages retail investors from reviewing them. The difficulty in navigating these documents leads many investors to rely on unregulated sources such as grey market trends or social media for IPO information. Sebi warned that such unofficial inputs are often inaccurate and could mislead investors, hampering orderly market growth.

By providing a concise and standardised summary, Sebi hopes to improve transparency, encourage informed participation, and reduce dependence on unreliable information. The regulator also expects this initiative to promote greater public engagement during the 21-day comment period when draft IPO documents are open for feedback.

Sebi has proposed allowing pledged pre-IPO shares to be treated as “locked-in” under a new depository-managed framework. This measure would prevent procedural delays for issuers and offer clarity to lenders regarding pledged shares before listing.

The regulator has invited public comments on these proposals through its online portal until December 4, 2025.