Firms pre-filing for IPOs may get to market to institutional investors

New clause to help issuers gauge institutional investor demand

The Securities and Exchange Board of India (Sebi) plans to allow companies taking the confidential pre-filing route for their initial public offerings (IPOs) to market their issues to institutional investors to gauge demand and arrive at fair pricing.

This follows industry feedback to the market regulator, seeking more flexibility over information flow. Earlier, it was envisaged that firms would only inform the regulator and the stock exchanges under the confidential filing mechanism.

However, the final framework — expected to be notified by the regulator soon — will include a ‘test the water’ (TTW) clause.

The clause will help issuers gauge