Summary of this article
Sebi Chief Tuhin Kanta Pandey highlighted the need for increasing retail participation in large public issues.
Sebi has proposed several reforms which are expected to enhance retail participation.
The primary market witnessed a weak start in the first half of 2025. However, companies and investors alike returned to the primary market in the second half, leading to a deluge of activity. Several large public issues also opened for subscription in the second half of the year, such as the Tata Capital IPO and the LG Electronics India IPO.
Amid this resurgence in the IPO market, Securities Exchange Board of India (Sebi) Chief Tuhin Kanta Pandey highlighted the need for increasing retail participation in large public issues. The enhanced participation is expected to promote financial inclusion, democratise wealth creation, and foster long-term stability in the equity market.
Speaking at the 12th SBI Banking and Economic Conclave, Pandey said that Sebi’s move to increase the IPO financing limit for individuals from Rs 1 million to Rs 2.5 million is aimed at enhancing deeper retail participation in large issues.
“The increase in the IPO financing limit for individuals from Rs 1 million to Rs 2.5 million will enable deeper retail participation in large public issues,” Pandey said.
Pandey also spoke about the need to deepen retail participation at the CNBC-TV18 Global Leadership Summit on November 7, 2025. Pandey cited NSE data and mentioned that in the current fiscal, over Rs 2 trillion has been raised via the primary market, and the number of unique investors now stands at 135 million in FY26. However, he added that despite this increase and a rise in awareness related to the securities market, only 9.5 per cent of the households in India actually invested in the financial market.
“Unique investors have crossed 135 million, up from just 38 million in FY19, indicating their confidence in our markets. However, our investor survey shows that while 63 per cent of households are aware of securities products, only 9.5 per cent have invested. Moreover, 80 per cent of households remain risk-averse, reflecting the fear of loss,” Pandey said.
Pandey mentioned that Sebi’s challenge lies in this underpenetration. He urged the industry to take advantage of this opportunity.“Therein lies our opportunity and our challenge. There is a deep well of domestic capital waiting to be deployed, and I urge the industry to take advantage of this opportunity,” Pandey said.
Pandey also spoke about the several changes that Sebi plans to undertake to achieve this goal and the changes that it has already undertaken. Here’s a look at some of the key changes proposed by Sebi:
Guidelines For Lower Public Float
Pandey said that several changes have been made for companies to list on the exchanges with a lower initial public offering. Additionally, the Sebi also mentioned that the timeline to meet Minimum Public Shareholding (MPS) requirements has also been revised.
“Changes have been recommended to allow scale-based guidelines for issuers to list with lower initial public float, consistent with market absorption capacity and minority shareholders’ interest. Timeline to meet Minimum Public Shareholding (MPS) has also been rationalised, with due regard to liquidity,” Pandey said.
Allowing large companies to list with a lower initial public float under scale-based guidelines can lead to a situation wherein issuers with higher market capitalisations can dilute a smaller percentage of their equity during the IPO process.
Additionally, they will also get a period of up to 10 years to comply with Sebi’s 25 per cent minimum public shareholding (MPS) requirement. The move is expected to prevent market oversupply and potential price drops that can occur with huge, sudden dilutions.
Rationalisation of the Offer Document
Pandey also talked about the rationalisation of the offer document for IPO bound companies. He stated that the summary of the Red Herring Prospectus and other offer documents will be rationalised further and made freely available to the public so that they can make more informed choices.
Prevention of Listing Delays
Pandey mentioned in his speeches that the process for IPO bound companies, whose pre-IPO shares are pledged, is being streamlined. The new framework seeks to ensure that the lock-in requirements are automatically enforced even if the pledge is invoked or released, thereby preventing listing delays.
Revision of Listing Timelines
Pandey added that the time taken for shares of IPO bound companies to list on D-street has also been reduced. He added that the timeline for IPOs has been changed to T+3.
“IPO listing timelines have been shortened to T+3, while rights issue timeline has been reduced to 23 days, from the average of 317 days taken earlier,” Pandey said.
Increased Number of Anchor Investors
Pandey highlighted that a key reform introduced for the primary market entails an increase in the number of permissible anchor investors. He added that registered life insurance companies and pension funds have been included in the portion reserved for anchor investors. This move is expected to enhance market stability and boost confidence in the Initial Public Offering (IPO) process for retail investors.
“The number of permissible anchor investors has been increased. Registered life insurance companies and pension funds are now included in the portion reserved for anchor investors,” Pandey said.
