The Securities and Exchange Board of India (SEBI) has proposed a
reduction in retail investor reservation and higher allocation for Qualified Institutional Buyers (QIBs)
for large initial public offerings (IPOs). Seven IPOs currently in the pipeline could be the first to benefit from this new structure.
According to Prime Database, these IPOs are either awaiting approval or have already received the market regulator’s nod.
The move comes after SEBI observed muted retail participation in most large IPOs exceeding Rs 5,000 crore,
except for popular issues like LIC, Tata Technologies, and Bajaj Housing Finance.
*Upcoming IPOs Eligible Under SEBI’s New Proposal*
| Company Name | IPO Size (Rs. crore) | Status |
|---|---|---|
| LG Electronics | 15,000 | Approved |
| Credila Financial Services | 5,000 | Approved |
| Dorf-Ketal Chemicals India | 5,000 | Approved |
| Billionbrains Garage Ventures (Groww) | 5,950 | Awaiting Approval |
| Tata Capital | 18,000 | Awaiting Approval |
| ICICI Prudential AMC | 10,200 | Awaiting Approval |
| Inox Clean Energy | 6,000 | Awaiting Approval |
Other big-ticket IPOs in the pipeline include National Stock Exchange (NSE) and Jio Infocomm,
although their details are yet to be finalized.
*What SEBI’s Proposal Means*
- For IPOs above Rs 5,000 crore, the retail quota may reduce from 35% to 25% in a graded manner.
- The QIB share will increase from 50% to 60%, with higher reservation for domestic mutual funds.
- This aims to ensure better price discovery, market stability, and issuer confidence in volatile conditions.
SEBI observed that direct retail participation has remained flat in the last three years,
while indirect participation via mutual funds has grown steadily.
The regulator believes that the increased QIB allocation will effectively include retail investors through mutual funds.
*Expert Opinion*
“This move safeguards retail investors, improves transparency, and helps companies list at fair market value.
It addresses the issue of large IPOs facing undersubscription in uncertain market conditions.”
For instance, the retail portion of HDB Financial Services IPO was subscribed only 1.5 times,
while Hexaware Technologies IPO saw just 0.1x subscription.
By rebalancing allocation towards QIBs, SEBI aims to
avoid negative sentiment, ensure demand stability, and support fair pricing for upcoming mega listings.
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