The Securities and Exchange Board of India (SEBI) Chairman has announced that the regulatory body will be releasing a proposal document on netting across securities today. This announcement marks a significant development in India's securities market regulatory landscape, as netting mechanisms play a crucial role in modern financial market operations.

Regulatory Development Details

The upcoming proposal document represents SEBI's continued efforts to enhance and modernize India's securities market infrastructure. Netting across securities is a fundamental aspect of market operations that affects how transactions are settled and risks are managed across different financial instruments.

Market Implications

The release of this proposal document is expected to provide market participants with comprehensive insights into SEBI's regulatory approach toward netting mechanisms. Such regulatory guidance typically serves as a foundation for industry consultation and eventual policy implementation, making this announcement significant for various stakeholders in the Indian financial markets.

Implementation Framework

According to the Chairman's announcement, the proposal document will be issued today, indicating the regulatory body's commitment to advancing this particular aspect of market infrastructure. The document will likely outline SEBI's framework and considerations regarding netting across different types of securities, providing a structured basis for further regulatory development in this area.

This initiative reflects SEBI's ongoing commitment to strengthening India's financial market infrastructure and ensuring robust regulatory frameworks that support efficient market operations.

Securities and Exchange Board of India (Sebi) has announced enhanced disclosure standards for initial public offerings, with chairman Tuhin Kanta Pandey emphasizing stricter transparency requirements during a recent industry event. The new guidelines aim to improve the quality of IPO documentation and strengthen investor protection mechanisms.

Enhanced Disclosure Requirements

Issuers must now provide comprehensive capital structure disclosures that clearly explain past capital-raising activities, preferential allotments, and any changes in control occurring close to the IPO timeline. Pandey stressed the importance of greater business model clarity, requiring transparent presentation of revenue and cost drivers.

The management discussion and analysis sections must move beyond basic narration to provide detailed explanations of both internal and external performance drivers. This shift represents a significant enhancement in the depth of information required from IPO applicants.

Strengthened Due Diligence Standards

Sebi's inspections have revealed concerning gaps in current due diligence practices. Pandey noted that due diligence processes are not always independent and frequently rely heavily on issuer undertakings rather than independent verification.

The new requirements mandate independent verification of projections, particularly for working capital and capital expenditure estimates. Investment bankers must maintain comprehensive backup documentation for all material statements included in IPO documents.

Market Performance and Pipeline

India continues to demonstrate strong IPO market performance, maintaining its global leadership position. The country ranks first worldwide in terms of IPO numbers and third in terms of fundraising value.

Sebi's internal estimates indicate a robust fundraising pipeline, with potential for issuers to raise an additional ₹1.50 lakh crore in upcoming offerings.

Valuation Concerns and Market Dynamics

Pandey highlighted significant concerns regarding valuation mismatches between unlisted share markets and IPO book-building processes. The disparity between pricing in unlisted markets and prices discovered during formal IPO procedures represents a key regulatory challenge.

The chairman acknowledged that pre-listing and post-listing environments operate as "different worlds," with substantial numbers of unlisted companies requiring regulatory attention. Sebi plans to explore solutions in consultation with the Ministry of Corporate Affairs.

NSE Settlement Development

In a separate announcement, Pandey confirmed that Sebi has agreed in principle to the National Stock Exchange's settlement application related to the co-location case. The settlement process is currently under review by various regulatory committees.

NSE had filed two applications in June 2025 to settle the long-standing co-location and dark fiber cases, offering to pay over ₹1,300 crore. The regulator indicated it expects to issue a no-objection certificate for the NSE IPO by month-end, marking progress in resolving these regulatory matters.