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What is a Confidential IPO Filing?

The confidential pre-filing mechanism enables an issuer proposing to undertake an initial public offering ("IPO") to submit its Draft Red Herring Prospectus ("DRHP") to the Securities and Exchange Board of India ("SEBI") and the stock exchanges without making the document immediately available to the public. Unlike the conventional filing process, the draft offer document remains confidential during SEBI's initial review and is made public only if the issuer decides to proceed with the offering.

The framework was introduced through the SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2022 by inserting Regulation 59C into the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 ("ICDR"). Although the filing process differs procedurally from the traditional route, issuers continue to remain subject to substantially the same disclosure standards and eligibility requirements applicable to main board IPOs.

Which is better, the confidential or traditional route?

From a regulatory and commercial perspective, the traditional filing route and the confidential pre-filing mechanism differ significantly. Under the traditional route, the DRHP is filed publicly with SEBI and the stock exchanges and is immediately made available for public comments in accordance with the ICDR. The DRHP is available for viewing only to SEBI under the confidential route, only the comment window is opened after the Updated DRHP is filed, and the fact of withdrawal receives considerably less public visibility. Companies can also enjoy flexibility with regards to timing as well: instead of being forced to go public when market conditions are favorable, they could time their listing to a favourable market environment. The traditional way gives the public and the analysts a head start; the confidential way allows a company to test the waters, and then step back and withdraw without attracting the same degree of public scrutiny or analysts as to why.

Why Companies Are Increasingly Opting for Confidential Pre-Filing?

Issuers provide reasons for their decision to opt for confidentiality that are more complex than any one factor and are best considered as a whole rather than as a checklist.

The most cited reason is due to the reputational risk management, OYO's experience is a testament to that. Its initial DRHP was presented to the public in September 2021 but was put on hold due to market concerns. It was back in the market in 2023 via the "confidential" channel and again in 2024, albeit on a lesser scale of public attention. A similar point is made by the experience of Indira IVF Hospital. It was submitted in February 2025, but voluntarily withdrew in March 2025 for an unspecified reason. Those who oppose the route believe that this gives an issuer the freedom to explain only after the fact why an offering failed to happen, while those who support the route say that this was what Regulation 59C was meant to stop.

The second factor to take into account is competitive sensitivity. It is no surprise that companies in fast-paced industries like fintech, edtech, and consumer tech are hesitant to share financials and operating metrics with other competitors before they are ready to sell commercially. Confidential route: allows SEBI to look at those numbers without informing the broader market or other bidders of an issuer's plans.
The third is time and market conditions, Swiggy has been interacting with SEBI for nearly five months prior to the release of its DRHP in the public domain, just a few weeks before it gets listed in November 2024. During that period the company was able to iron out the timing based on investor appetite instead of a fixed public timeline that was previously announced.

A fourth (and less reported) consideration is also valuation discipline. Winners of the game are those who can present a public DRHP with greater success, while still holding anchor and institutional investor pricing discussions. A public DRHP is the key to a successful game of anchor and institutional investor pricing discussions before they are done and is a game-winner. Confidentiality enables the company and bankers to negotiate the value of the company behind closed doors, before anyone can see it on the charts.

A fifth consideration is about regulatory dialogue. The pre-filing process gives an issuer and its advisors a more honest, round-robin discussion with SEBI about disclosure and structuring concerns without successive exchanges of queries and responses becoming a public manifestation of either the issuers' or SEBI's weaknesses or delays.

Last, there is a reputational element that has to do with the bankers and the advisor of the issuer, A public withdrawal of a filing is in essence a public failure that is not only for the company, but for all merchant bankers, lawyers and auditors whose names appear on it. The confidential route helps minimize this collective exposure, and that is not a small factor in a marketplace where advisory business mandates, particularly, are often won based on track record.

Who's in, who's out!

Confidential pre-filing is not a one-size-fits-all solution. Whether to adopt this route should depend on the issuer's specific business, market conditions and transaction objectives.

Confidential filing is generally appropriate for large, well-capitalized issuers that have truly valuable confidential competitive information for which disclosure would be damaging, like platform businesses, fintech firms and other tech-driven businesses whose metrics may be used by competitors if disclosed. It is also appropriate for issuers in markets that may be uncertain or volatile and where the ability to exit quietly offers the optionality without the risk of reputation or for issuers with unresolved internal valuation, use of proceeds or corporate structuring issues that would be premature to put on public display. Companies facing potential litigation, regulatory proceedings or related-party transactions that necessitate careful and unhurried disclosure drafting may also benefit from the extra space the confidential process provides.

The route may be a little more appropriate for larger or more experienced issuers who have the resources to handle the legal and compliance aspects, as the project is not subject to the same timelines or pressures as a public offering, and this can be a bit of a challenge on the other side. It is not as appropriate for issuers that find public transparency itself to be an asset of credibility, like consumer businesses who want to establish investor and consumer trust through a transparent, closely-monitored public process. Lastly, an issuer that is reasonably confident that it will continue toward listing, and would benefit from early public and analyst involvement in constructing a book of long-term, institutional investors, may be better off than confidentiality on the traditional path.

What the data shows

Since the route opened in November 2022, only a handful of companies used it in the first two years. That changed in 2025. Of the roughly 16 companies that have opted for confidential pre-filing since the route began, 12 filed in 2025 alone, meaning three-quarters of all confidential filers to date came in that single year. June 2025 was the busiest month, with five companies filing confidentially. The issue sizes involved were substantial: Tata Capital at ₹17,200 crore, Meesho at ₹4,250 crore, PhysicsWallah at ₹4,000 crore, and etc. The same analysis complicates a common assumption. It is not only new-age startups using this route; of the 16 companies that have opted for pre-filing, eight are traditional or legacy businesses, including Tata Play, Tata Capital, Vishal Mega Mart, and the aerospace parts manufacturer Aequs.

The Road Ahead

Caution is warranted in respect of the statistics that circulate around this subject. SEBI does not itself publish a running public tally of confidential filings against total IPO filings, and the percentage figures that appear in market commentary are typically derived by private data providers rather than disclosed by the regulator. What can be stated with confidence, because it rests on SEBI's own observation letters and approvals, is the pattern of usage: only a small number of issuers used the confidential route between its introduction in November 2022 and the end of 2024, and usage increased materially through 2025 and into 2026, with SEBI granting observations or approvals to a widening list of large, well-known issuers, including Tata Capital and Meesho, over this period.

In Sum

What began as an alternative filing mechanism has rapidly evolved into a strategic capital markets tool. Confidential pre-filing reflects a broader shift towards balancing regulatory oversight with commercial flexibility. As more mature issuers and high-growth companies adopt this route, its continued success will depend on maintaining the equilibrium between confidentiality during the review process and transparency once securities are offered to the investing public. The evolution of Regulation 59C demonstrates SEBI's willingness to align India's capital markets framework with international best practices while preserving the disclosure standards that underpin investor confidence.

• Authored by Mallika Agrawal, Associate and Meenakshi Acharya, Partner at RMA Legal

Disclaimer

This publication has been prepared by RMA Legal for general informational purposes only and does not constitute legal, tax, financial or any other professional advice. The information has been compiled from sources believed to be credible; however, it is provided on an “as is” basis without any representation or warranty, express or implied, as to its accuracy or completeness, and RMA Legal shall not be liable for any loss arising from reliance on this publication. Readers are advised to seek appropriate professional advice before taking any action.