Dalal Street Confidential: Why Has India Inc Warmed Up to Pre-Filing of IPOs?

In recent months, several big names in Indian business have shown an increasing interest in pre-filing IPOs with the Securities and Exchange Board of India (SEBI). Companies like Tata Play, Oyo, Swiggy, Vishal Mega Mart, Credila Financial Services, Indira IVF, PhysicsWallah, Tata Capital, and boAt are among those that have opted to pre-file their offer documents for Initial Public Offerings (IPOs). But why is this trend gaining traction among India Inc?

The pre-filing process has emerged as a strategic move for companies planning to go public. Tata Play was the first to kickstart this trend in December 2022, setting the stage for others like Oyo to follow suit in the months that followed.

What is Pre-Filing and Why is it Important?

Pre-filing involves submitting an initial draft of the offer document to SEBI before the company officially announces the IPO. This step allows SEBI to review and suggest changes in the draft offer document. Once the SEBI approval is received, the company can move forward with the official filing and launch of the IPO.

This method offers several advantages. Pre-filing helps in identifying potential regulatory issues early, allowing companies to make necessary changes before they officially launch their IPOs. It also allows the companies to gauge market sentiment and investor interest before fully committing to the public offering process.

Why Are More Companies Opting for Pre-Filing?

1. Improved Regulatory Transparency: By pre-filing their IPOs, companies can work closely with SEBI to ensure that all regulatory requirements are met, avoiding delays or hiccups in the IPO process.

2. Market Sentiment Insights: Pre-filing gives companies a chance to understand the market’s pulse and make necessary adjustments before launching their IPO. This early feedback is crucial in planning the right timing and pricing for the offer.

3. Faster IPO Process: Once SEBI clears the pre-filed documents, companies can move more swiftly into the IPO process without facing regulatory delays. This provides a quicker route to going public.

4. Increased Investor Confidence: When companies pre-file their IPOs and comply with regulatory processes early, it signals transparency and trustworthiness, boosting investor confidence.

The growing interest in pre-filing IPOs reflects a shift in how companies are preparing for the public market, with a focus on due diligence, early feedback, and regulatory efficiency.

Which Companies Have Joined the Pre-Filing Trend?

In addition to Tata Play and Oyo, companies such as Swiggy, Vishal Mega Mart, Credila Financial Services, Indira IVF, and boAt have all chosen this approach for their respective IPOs. This growing list of companies highlights the increasing acceptance and appeal of pre-filing as a strategy for smoother and more efficient public offerings.

By opting for pre-filing, these companies aim to reduce uncertainty and regulatory delays, allowing them to plan their public offerings with greater precision and confidence.

What’s Next?

As more companies warm up to the idea of pre-filing IPOs, the trend is expected to continue growing in the future. The move could become a standard practice for Indian companies aiming to go public, as they look for ways to streamline the IPO process and enhance their appeal to investors.