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SEBI open to exploring partial oversight of pre-IPO market
SEBI is considering limited regulation for shares of companies about to list — specifically in the period after a company’s DRHP (draft red-herring prospectus) is approved but before the stock begins trading on an exchange.
This regulatory interest is aimed at addressing distortions like unregulated grey-market premiums (GMPs) that can inflate expectations and cause unreliable price signals ahead of IPOs.
SEBI explicitly clarified that any potential oversight would not extend to the broader unlisted share market — only to the narrow “to-be-listed” space where the regulator has statutory authority.
The regulator stressed that these discussions are still exploratory — there’s *no finalized draft, no detailed proposal, and no set timeline for when or whether such changes would actually be implemented.
If such a framework is pursued, it would likely apply only for a limited window before listing, rather than regulating all unlisted equity trading.
SEBI noted that operational and regulatory questions remain, and more work would be needed to figure out how to make any such oversight practical before formal rules are introduced.
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