SEBI may introduce a pre-IPO trading platform on a pilot project basis: Chairman Tuhin Pandey

New Delhi: Capital market regulator SEBI is likely to introduce a regulated entity where pre-IPO (initial public offering) companies trade after making certain disclosures, said SEBI chairperson Tuhin Kanta Pandey on Thursday, 21 August. The regulated platform would be on a pilot project basis.

Pandey was speaking at an event organised by FICCI. He further said the need for such a platform arises because pre-listing information is not sufficient for investors to make an informed investment decision.

He hinted at an initiative "on a pilot basis for a regulated venue where pre-IPO companies can choose to trade subject to certain disclosures." The proposed initiative is expected to take care of and do away with the unnecessary process and friction points that usually come with fundraising, disclosures, and investor onboarding, he added.

Additionally, this initiative will be set to open multiple avenues that will explore emerging areas, products, and asset classes that create both demand and supply of capital.

On asking about whether there was any discussion with depositories (NSDL and CDSL) on this issue of pre-IPO trading platforms, he said, "This is only in principle with what I am stating."

The expected new platform may permit investors to trade shares on a regulated entity in the three-day period between IPO allotment and listing. The initiative may be expected to replace the existing unregulated grey market, which gives the unofficial data on GMP (grey market premium). The grey market operates during the period between allotment and listing.