If Public Money, Then Why Not Public Scrutiny: Why SEBI’s Confidential IPO Filing Could Create Information Gaps That Could Cost Investors?

Opening: A Question That Deserves an Answer

There is a phrase that sits at the very core of financial regulation — “public interest.” It is the reason regulators exist. It is the justification for every disclosure requirement, every audit mandate, every prospectus filing rule. It is, in theory, the North Star that guides institutions like the Securities and Exchange Board of India.

And so, when SEBI introduced its confidential pre-filing route for Initial Public Offerings in November 2022 — a mechanism that allows companies to file their Draft Red Herring Prospectus (DRHP) with the regulator without immediate public disclosure — it raised a question that deserves far more public debate than it has received. If an IPO is, by its very nature, an appeal to the public for money, how does keeping that appeal secret from the public serve the public interest?

This question is not asked in bad faith. The confidential filing route has genuine, reasoned arguments in its favour, and those arguments must be examined honestly. But a policy that affects the financial decisions of millions of ordinary Indian investors — people who will eventually be asked to buy shares in companies that were quietly reviewed behind closed doors — deserves rigorous scrutiny. That scrutiny has been conspicuously absent.

This article attempts to provide some of it.

I. The Regulatory Framework: What SEBI Actually Did

To understand why the confidential IPO route is problematic, one must first understand precisely what it is.

SEBI introduced the pre-filing mechanism in its board meeting in November 2022, and the framework was subsequently codified under Chapter IIA of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 — the ICDR Regulations. The mechanism itself was modelled largely on a precedent set by the United States in 2012, when the Jumpstart Our Business Startups (JOBS) Act allowed Emerging Growth Companies to submit draft registration statements to the Securities and Exchange Commission for non-public review. The UK, Canada, and Hong Kong have implemented similar frameworks in the years since.

Under SEBI’s Indian variant, the process unfolds roughly as follows. A company files its DRHP with SEBI and the relevant stock exchanges — but this document does not enter the public domain. SEBI reviews it, issues its observations privately, and the company may then use those observations to refine its financial and strategic disclosures away from any public scrutiny.

It is only when the company decides it is ready to proceed — at a time of its own choosing — that it files an Updated Draft Red Herring Prospectus (UDRHP-I), which becomes public and is open for comment. A second updated document (UDRHP-II) incorporating public comments is then filed but, critically, is itself not made public. The Red Herring Prospectus (RHP), the final document before the IPO opens, is the next public-facing document.

The framework also extends the validity of SEBI’s observations from 12 months under the traditional route to 18 months, and it substantially increases flexibility in IPO structuring — including allowing changes in fresh issue size of up to 50% (versus only 20% in the traditional route).

As SEBI’s own November 2022 Board Meeting Note revealed, between 2018 and 2021, out of 129 companies that filed offer documents with the regulator, 57 ultimately did not proceed with their IPOs. The regulator cited this high dropout rate as a key justification for introducing a mechanism that reduces companies’ exposure if they ultimately choose not to list. The note also highlighted concerns about competitive sensitivity — that requiring early public disclosure of a company’s financial strategies, operational risks, and business model could disadvantage it if a rival was watching closely.

These are not trivial concerns. They are legitimate regulatory considerations. But they are also, on careful examination, concerns that exclusively protect the interests of companies seeking to list — not the investors being asked to fund them.

II. The Grey Area: When Flexibility Becomes Opacity

Every piece of financial regulation operates somewhere on a spectrum between two competing goods: transparency, which protects investors, and flexibility, which encourages capital formation. SEBI’s confidential pre-filing route does not sit at an extreme position on this spectrum — it is not, for instance, a system that allows companies to go public without any disclosure at all. The UDRHP-I does eventually become public, and the RHP is publicly available before the IPO opens.

But, isn’t “eventually” doing an enormous amount of regulatory work in that sentence, and this is precisely where the grey area lies?

Under the traditional IPO route, when a company files its DRHP with SEBI, it simultaneously enters the public domain. This means journalists, market analysts, competitor analysts, financial researchers, industry experts, and ordinary investors all receive the same information at the same time and have the same opportunity to interrogate it. The feedback that emerges from this public examination is messy, sometimes unfair, often speculative, but it is also frequently invaluable. It is a market intelligence function that no regulator, however diligent, can replicate on its own.

Under the confidential pre-filing route, this public intelligence function is deferred — sometimes by many months. SEBI reviews the document in isolation, without the benefit of knowing what industry experts might notice about, say, a company’s customer concentration risk, or what former employees might observe about the accuracy of its headcount disclosures, or what rival companies might know about exaggerated market share claims. By the time the public does see a version of the document, the SEBI observations have already been incorporated — but no one outside the regulator knows what those observations were, what was changed, or what the original document looked like.

This creates a structural information asymmetry that should concern anyone who understands how capital markets work. The company and its advisors have had the full benefit of regulatory feedback and the time to craft a polished narrative. Institutional investors, who may have received a private “testing the waters” presentation from the company under the framework’s provisions for limited marketing to Qualified Institutional Buyers (QIBs), have had additional private access to management. The retail investor, by contrast, receives a curated, pre-reviewed, institutionally tested document and is given a compressed window to make a decision.

The grey area here is not merely definitional. It is structural. It is built into the framework itself.

III. The Public Money Paradox: Why Scrutiny Should Follow Investment

Let us state the paradox plainly. An IPO exists because a company needs money from the public. The mechanism works precisely because it allows companies to raise capital from thousands or millions of ordinary citizens who believe, based on the information provided, that the company is worth investing in. The entire system rests on the premise that those ordinary citizens have enough information to make a reasonably informed decision.

If that is true, then why should the process of developing and refining that information be shielded from those very citizens?

A company that files its DRHP confidentially is, in effect, asking the regulator to review information that the people who will eventually fund it are not allowed to see. It is asking for the legitimacy of SEBI’s imprimatur while simultaneously asking that the public’s role in scrutinising the information be minimised. This is a curious arrangement.

Proponents of the confidential route will argue that public disclosure before SEBI’s review is complete can be actively harmful — that it generates speculative noise, media misinformation, and social media panic that can distort the process. There is truth to this argument, and the examples of Mamaearth and MobiKwik, which we will examine shortly, do demonstrate the disruptive potential of early public exposure. But the solution to noisy public feedback is not to eliminate public feedback — it is to create better mechanisms for structured, informed, and timely feedback. Removing the public from the process is a blunt instrument for a problem that deserves a more nuanced response.

Moreover, the argument proves too much. By the same logic, one could argue that quarterly financial disclosures should be eliminated because they create short-term market volatility. Or that annual reports should be simplified because retail investors cannot properly interpret complex financial statements. The logic of “public scrutiny causes disruption, therefore limit public scrutiny” has no natural stopping point.

There is also a deeper question about accountability. When a company goes through the traditional IPO route, the public examination of its DRHP creates a paper trail. Analysts publish research. Journalists write critical assessments. Financial bloggers examine specific line items. This body of public commentary creates a record against which the company’s subsequent performance can be measured and judged. Under the confidential route, the absence of early public commentary means that accountability for disclosures that turn out to be misleading or inadequate is harder to establish after the fact.

In analysis of the confidential filing mechanism noted, the absence of immediate accountability and transparency may lead to public concerns about trust, and confidential filing often results in limited time for investors to analyse the company’s details before the IPO launch — which may affect their investment decisions.

IV. The Case Studies: What Public Scrutiny Revealed — And Why It Mattered

The strongest argument for the confidential IPO route is that public scrutiny of DRHPs is often disproportionate, driven by incomplete information, and can unfairly damage companies that are fundamentally sound. This argument gains some legitimacy from examining the cases of the companies cited in the SEBI framework’s context. But those same cases also reveal something the advocates of confidential filing do not often acknowledge: when public scrutiny leads to valuation corrections, it is usually because the original valuation was genuinely inflated. The correction is not a failure of the process — it is the process working.

Mamaearth (Honasa Consumer): The Valuation Reality Check

In late 2022, Honasa Consumer, the parent company of Mamaearth, filed its DRHP through the traditional public route, seeking to raise approximately Rs 1,700 crore. Almost immediately, media reports circulated suggesting the company was targeting a valuation of around Rs 20,000 crore, a number extrapolated from the filing but not explicitly stated in the document. What followed was a months-long storm of public scrutiny that the company’s founders later described as deeply disorienting.

The scrutiny was not merely speculative noise, however. Analysts who examined the DRHP identified a genuinely concerning picture. Marketing and advertising expenses of Mamaearth were running at nearly 40% of revenues, which is an extraordinary figure that raised fundamental questions about whether the brand’s apparent consumer loyalty was actually dependent on perpetual advertising spend. The company had only recently turned profitable. As one research analyst from Samco Securities noted at the time of the eventual IPO, the profit had been inconsistent and a clear growth strategy was lacking, with advertising and marketing expenses that were incredibly high relative to revenues.

The consequence of this public scrutiny was significant. By the time Mamaearth actually launched its IPO in October 2023, the price band of Rs 308-324 implied a valuation of between Rs 9,900 crore and Rs 10,400 crore — dramatically lower than the Rs 20,000 crore that had been floated during the DRHP controversy. Even at this reduced valuation, multiple brokerage houses and analysts recommended caution while buying the IPO. On the first two days of subscription, total bids reached only around 30% of the issue size.

Was the public scrutiny harsh? Yes. Was some of it based on speculative valuation numbers rather than the actual DRHP? Also yes. But the core analytical observations, about advertising spend, profitability sustainability, and business model vulnerability were legitimate. They were the kind of observations that retail investors deserved to have access to before being asked to invest. And in a very real sense, the public scrutiny forced Mamaearth to price its IPO at a level closer to what the market believed it was actually worth.

Had Mamaearth used the confidential pre-filing route, none of this early scrutiny would have occurred. The valuation debate would have been deferred. Retail investors might have been presented with a polished UDRHP and a compressed timeline, with institutional investors already privately briefed. The outcome for retail investors could have been significantly worse.

MobiKwik: A 73% Valuation Haircut Over Three Years

The MobiKwik story is perhaps the most dramatic illustration of what sustained public and market scrutiny can do to a company’s IPO valuation, and why that scrutiny, however uncomfortable for the company, serves an important investor protection function.

In 2021, MobiKwik filed its first DRHP with plans to raise Rs 1,900 crore — comprising a fresh issue of Rs 1,500 crore and an offer for sale of Rs 400 crore. At that time, the company was valued at approximately $921 million (around Rs 7,700 crore) in the private market, and its IPO-era valuation aspirations were even higher. But the public filing of the DRHP enabled market participants to examine the company’s financials closely.

What they found, an unprofitable fintech operating in a rapidly commoditising market, increasingly displaced by UPI’s government-backed expansion made the proposed valuation deeply questionable. MobiKwik let its DRHP lapse without proceeding. In January 2024, it refiled, this time seeking to raise only Rs 700 crore, which is a reduction of more than 63%.

This is a staggering correction. And it raises an uncomfortable question: if MobiKwik had had access to the confidential filing route in 2021, would it have been able to complete an IPO at an unjustifiably high valuation before the market had the time and information to push back? It is impossible to say with certainty. But the mechanism of early public filing, which gave analysts, journalists, and retail investors the opportunity to examine the company’s financials and question its valuation, played a meaningful role in preventing a potentially harmful outcome for ordinary investors.

Amagi Media Labs: Premium Pricing Under Pressure

Amagi Media Labs, a Bengaluru-based SaaS provider for broadcast and streaming infrastructure, filed its DRHP with SEBI in July 2025 seeking to raise Rs 1,020 crore through a fresh issue, with existing investors including Accel and Premji Invest also seeking to exit through an Offer for Sale of approximately 3.4 crore shares. The company was valued at $1.4 billion as of its November 2022 Series F funding round — a unicorn valuation built during the peak of global SaaS enthusiasm.

By the time Amagi actually launched its IPO in January 2026, however, the numbers told a more sobering story. The fresh issue size had been reduced from Rs 1,020 crore to Rs 816 crore — a cut of approximately 25%. The OFS component was also trimmed by around 22%. The IPO was priced at Rs 361 per share at the upper end of its band, implying a post-issue market capitalisation of approximately Rs 7,810 crore — or around $885 million. This represented a meaningful discount to the company’s unicorn valuation from 2022.

What drove this recalibration? In no small part, it was public analysis of the company’s financials. Despite a revenue CAGR of 30.7% between FY23 and FY25, Amagi was still reporting net losses — with a loss of Rs 68.71 crore in FY25. Analysts flagged the company’s heavy dependence on a contractual commitment to spend Rs 2,330.97 crore on cloud services over six years from May 2025 to April 2031, and noted that 90.20% of its revenue in FY25 came from North America and Europe — creating significant geographic concentration risk.

The public availability of these facts in a disclosed DRHP that could be examined, picked apart, and publicly debated contributed to the pricing discipline that ultimately emerged. The question is whether a confidential filing process, with its deferred disclosure and compressed public review window, would have enabled the same quality of market-based price discovery.

Shadowfax: Valuation Moderation After Regulatory and Market Feedback

Shadowfax, the Flipkart-backed logistics company, chose the confidential pre-filing route for its IPO, filing its DRHP privately with SEBI in July 2025. The company was initially reported to be targeting a post-issue valuation of around Rs 8,500 crore, representing a premium to its February 2025 funding round valuation of approximately Rs 6,000 crore. After SEBI issued its observations and the UDRHP was filed, Shadowfax’s IPO eventually launched in January 2026 — but by that time, the targeted valuation had been revised downward to approximately Rs 7,400 crore.

This downward revision is instructive, because it occurred even within the confidential filing framework, suggesting that market forces and institutional investor feedback during the “testing the waters” phase can constrain excessive valuations even when retail investors are not part of the early conversation. But the broader question is whether retail investors, who only received the public UDRHP shortly before the IPO opened, had adequate time to independently assess the risks that public analysts subsequently identified.

Those risks were significant. Shadowfax disclosed that a single client had contributed between 48% and 59% of its revenue from operations across recent financial periods — an extraordinary concentration that made the company’s revenue stream highly vulnerable to a single commercial relationship. Its delivery partner network of over 200,000 individuals was non-exclusive, meaning the company had limited control over the workforce most critical to its operations. Net losses in FY24 had narrowed to Rs 11.8 crore from Rs 142.64 crore in FY23 — an improvement, but not yet sustained profitability.

These are facts that deserve careful consideration. How much time did the average retail investor have to consider them after the UDRHP became public and before the IPO opened for subscription?

Capillary Technologies: An Oversubscribed IPO Does Not Always Mean a Well-Priced One

Capillary Technologies, an AI-driven customer loyalty SaaS platform, presents a different kind of case study. The company originally filed a DRHP in December 2021, seeking to raise approximately Rs 850 crore. It deferred its listing plans at that time — a decision that, in retrospect, may have been wise, given the broader correction in technology stock valuations that followed. When it returned to the IPO market in 2025, the company filed a fresh DRHP seeking to raise Rs 430 crore in a fresh issue alongside an Offer for Sale of 18.33 million shares. 

By the time the IPO launched in November 2025, the issue had been modified: the fresh issue size was trimmed, and some OFS sellers including Ronal Holdings and Filter Capital India withdrew their plans to sell shares. The company was eventually priced at a P/E of approximately 299 times its earnings — a valuation that analysts across multiple brokerages, including Swastika Investmart, characterised as aggressive. Global SaaS peers like Salesforce were trading at around 40 times earnings, and Adobe at around 29 times, making Capillary’s pricing look difficult to justify on a relative basis.

The IPO was ultimately oversubscribed — 52.95 times, in fact, which sounds like a roaring success. But oversubscription is not the same as appropriate pricing. India’s IPO market has a well-documented tendency toward oversubscription of even aggressively priced issues, driven partly by the lottery-like nature of small lot allotments and partly by grey market premium speculation. The fact that an IPO is oversubscribed tells us that demand exceeded supply at the offering price — it tells us nothing about whether the offering price was fair to long-term investors.

The case of Capillary Technologies raises a question that is particularly relevant to the confidential filing debate: if the early public scrutiny that occurs under the traditional route can sometimes pressure companies to moderate their valuations before the IPO opens, does the compressed timeline of the confidential route create structural conditions that allow aggressive pricing to persist even when public analysis, once it does occur, suggests it is unwarranted?

V. The Information Gap Problem: Less Time, Less Knowledge, More Risk

One of the most practical risks of the confidential IPO route is the compression of the time window between public disclosure and the opening of the IPO for subscription. Under the traditional route, the DRHP enters the public domain as soon as it is filed with SEBI. This can be many months before the IPO actually opens, giving the market extensive time to analyse, debate, and digest the company’s disclosures.

Under the confidential route, the public first sees the UDRHP-I only after SEBI has already issued its observations and the company has decided to proceed with its listing. The RHP then follows. The practical result is that the publicly available window for analysis is dramatically shorter than under the traditional route.

This delayed release of information can lead to uncertainty and sudden market surprises when the filing goes public, and limited time for investors to analyse the company’s details before launch can affect their investment decisions. The framework itself acknowledges the distinction: it is a pre-IPO regulatory step where the DRHP is being reviewed by the regulators, but not under public scrutiny.

This information gap matters more for retail investors than for institutional ones. A large domestic mutual fund or a foreign institutional investor has the resources to quickly deploy analysts, access management presentations, and conduct rapid due diligence within a compressed timeframe. A retail investor sitting in Pune or Patna, considering whether to invest his savings in an IPO that opened for subscription three days ago, does not have those resources. The confidential filing route, by compressing the public analysis window, effectively advantages institutional investors over retail ones in a market that SEBI has repeatedly stated it wants to make more accessible to retail participation.

There is also the problem of what might be called “manufactured optimism” in the compressed disclosure window. When a company’s UDRHP enters the public domain, it arrives accompanied by institutional roadshows, financial media coverage, anchor investor announcements, and grey market premium speculation. All of this creates an environment of IPO enthusiasm that can drown out more cautious analytical voices. The longer public engagement window of the traditional route — with its months of open-access DRHP analysis — provides some counterweight to this institutional enthusiasm machine. The confidential route removes that counterweight.

VI. Insider Trading and the Asymmetry of Private Knowledge

One aspect of the confidential filing framework that has received insufficient attention is the elevated risk of insider trading during the pre-filing period. Under the confidential route, a company can conduct “testing the waters” presentations to Qualified Institutional Buyers (QIBs). This means that selected institutional investors receive material non-public information about a company’s IPO plans, valuation expectations, and financial position — information that is not available to retail investors. Even with appropriate non-disclosure agreements and regulatory safeguards, this asymmetry creates conditions that are structurally favourable to informed trading. Certain parties may be able to access material non-public data in the confidential filing period, increasing insider trading risks.

SEBI has existing insider trading regulations that apply to this context, and the framework does include restrictions on public marketing during the pre-filing phase. But the grey market for IPO shares in India is large, active, and largely unregulated. Grey market premiums begin forming well before IPOs open for public subscription, and they are frequently influenced by private information flowing from institutional networks. The confidential filing period, during which a company’s IPO plans are known to a limited circle of institutional investors and advisors but not to the general public, is a period of elevated exposure to information-driven grey market activity.

VII. The Accountability Deficit: What Happens When It Goes Wrong?

Perhaps the most serious long-term concern about the confidential filing framework is the potential reduced accountability it creates when companies disappoint after listing. Under the traditional IPO route, when a company’s post-listing performance fails to meet the expectations created by its DRHP, there is an extensive public record against which its disclosures can be evaluated. Analysts who published positive assessments of the company’s DRHP disclosures face reputational consequences if those assessments turn out to have been based on misleading or inadequate information. The company’s management faces pointed questions from a public that has had months to familiarise itself with the original promises.

Under the confidential route, the public documentation trail is shorter and shallower. The UDRHP-I that the public sees has already been through regulatory review and management refinement. The original DRHP, with all its unpolished disclosures, its original assumptions, its initial risk factors before the regulatory feedback process shaped them is not publicly available. If the company subsequently underperforms, it is harder to establish what the original narrative was and how it evolved through the confidential process.

This is not a hypothetical risk. Indian markets have seen a series of high-profile post-listing disappointments from new-age technology companies, like Paytm, PB Fintech in its early listing days, Delhivery, where the gap between IPO-era promises and post-listing reality was stark. Each of those cases generated investigations and regulatory inquiries that depended on the public availability of the original DRHP disclosures. A confidential filing framework, by reducing the paper trail, may make such accountability exercises harder to conduct in future cases.

VIII. The Structural Imbalance: Who Does the Framework Serve?

It is worth stepping back and asking a simple question: if we were designing an IPO regulatory framework from first principles, for whom would we design it? The obvious answer is: for investors. Investors are the people whose money makes the IPO possible. They are the people whose financial wellbeing depends on the accuracy and completeness of the information disclosed. They are the people who bear the financial risk if the company underperforms.

Now look at the confidential pre-filing route through this lens. Every benefit of the framework, from reduced exposure to competitive intelligence risk, the flexibility to time the IPO strategically, the extended 18-month window to proceed, the ability to change IPO structure by up to 50% after regulatory observations, the “testing the waters” mechanism to gauge institutional interest privately, accrues primarily to the company and its existing investors who are exiting through the Offer for Sale.

The retail investor, by contrast, gets a shorter window to analyse the document, less accumulated public research to draw on, compressed time between disclosure and subscription, and a document that has been carefully shaped through a regulatory review process conducted entirely out of sight.

This does not mean the framework is necessarily wrong. Regulatory design always involves tradeoffs, and the benefits to capital formation that the framework is designed to promote can, if they work as intended, ultimately expand the universe of high-quality companies that reach the public market. A framework that helps companies go public without being unfairly damaged by premature disclosure can, in theory, benefit investors by giving them access to better companies.

But the theory depends on assumptions about how well SEBI’s private review substitutes for public scrutiny, and the evidence from the cases examined in this article suggests that public scrutiny, for all its messiness, catches things that private review may miss.

IX. The International Precedent: Is India Following the Right Model?

When SEBI introduced the confidential filing route, it explicitly drew on the experience of the United States, the United Kingdom, Canada, and Hong Kong. These are serious, well-regulated markets, and the existence of similar frameworks in those markets is a relevant data point.

But there are important differences in context that make direct comparison imperfect. In the United States, the JOBS Act’s confidential filing provisions were specifically designed for Emerging Growth Companies — firms with less than $1 billion in revenue. The rationale was that smaller, earlier-stage companies lacked the resources to manage the public scrutiny of a full SEC filing process while simultaneously running their businesses. The provision was a targeted exception for a specific category of issuer, not a general alternative to public disclosure.

In India, SEBI’s confidential route has no such revenue cap or size restriction. Large, well-resourced companies including those targeting valuations of thousands of crores can use it. The companies that have already used or announced plans to use the confidential route in India include Tata Capital Limited, Swiggy Limited, Vishal Mega Mart Limited, Physics Wallah Limited, Tata Play Limited, OYO, Shadowfax, boAt, and Groww. These are not small, resource-constrained startups. They are large, well-funded companies with experienced management teams and sophisticated investment banking advisors. The argument that they need protection from the disruption of public scrutiny is considerably harder to sustain.

Moreover, the US market has significantly more sophisticated retail investor protections and a longer culture of investor litigation than India does. In the US, a company that misrepresents material facts in its IPO filings faces robust class action lawsuit exposure. In India, the retail investor’s practical ability to pursue legal remedies against corporate malfeasance is considerably more limited. This makes the transparency provided by early public disclosure more important in India than in markets with stronger investor legal protections — not less.

X. What Should Change: A Path Toward Balanced Reform

Criticism without suggestion is intellectually incomplete. If the confidential filing framework has genuine problems, what should be done?

The most important reform would be the introduction of a mandatory minimum public review window between the release of the UDRHP-I and the opening of the IPO for subscription. Currently, the framework does not specify a minimum gap. A minimum of 21 days, genuinely substantial, not counted from filing but from the date the document is accessible to the general public would give retail investors, independent analysts, and civil society a meaningful opportunity to scrutinise the disclosure before subscription opens.

A second reform would be to require partial disclosure of SEBI’s observations on the pre-filed DRHP, not necessarily the entire observation letter, but a summary of the material areas where the regulator required clarification or amendment. This would give the public some insight into what the regulatory review process found, without compromising the confidentiality that companies legitimately need during the early stages.

Third, the “testing the waters” mechanism for institutional investors should be accompanied by a corresponding “testing the waters” report — a summary of the institutional presentations given, including any forward-looking statements or financial projections shared, that is published alongside the UDRHP-I. If institutional investors are receiving information that retail investors are not, that asymmetry should be made transparent.

Finally, there is a case for introducing a revenue or size cap on the use of the confidential route — reserving it for genuinely smaller issuers and requiring larger companies to use the traditional public-disclosure process.

Conclusion: Transparency Is Not a Luxury

India’s IPO market is one of the most dynamic in the world. In 2023 and 2024, it saw record numbers of new listings, record retail participation, and an extraordinary surge of interest from first-time investors who are deploying their savings in public markets in unprecedented numbers. This is, on balance, a positive development — but it is one that carries real risks if the regulatory framework fails to keep pace with the complexity and scale of the companies seeking public capital.

The confidential IPO filing route is a legitimate regulatory tool. It addresses real problems like competitive sensitivity, market timing risk, the high dropout rate among companies that expose themselves through public DRHP filing and then find conditions unfavourable. These problems deserve regulatory solutions.

But solutions that serve companies at the expense of investors are not solutions — they are substitutions of one problem for another. When Mamaearth faced public scrutiny that forced a dramatic valuation correction, the scrutiny was not the problem. The inflated valuation was. When MobiKwik’s original Rs 1,900 crore IPO at nearly $1 billion in valuation collapsed under market pressure and had to be relaunched three years later at $250 million, that compression was not the failure of public disclosure — it was public disclosure working exactly as it should.

The question SEBI must continue to grapple with is not whether companies deserve protection from disruptive public scrutiny. The question is whether the public, the people whose money powers the IPO market, deserves the tools to scrutinise the companies asking for their money. And the answer, in any financial system worthy of the trust invested in it, must be yes.

Public money demands public accountability. That principle is not flexible. That principle cannot be confidential.