A new IPO playbook: Why firms are turning to confidential filings in India

Tata Capital, Imagine Marketing (the parent company of consumer devices maker boAt), PhysicsWallah, and Indira IVF (which later withdrew) recently pursued confidential initial public offering (IPO) filings, inspired by the success of Swiggy and Vishal Mega Mart. Though the Securities and Exchange Board of India (Sebi) introduced this pre-filing option three years ago, it initially gained little traction. From December 2022 to January 2025, only four companies chose this route. However, since February 2025, four more have followed, with market insiders hinting at more to come.

 

Though the traditional IPO process is quicker and simpler, volatile markets, strategic flexibility, and the unique benefits of confidential filing are fuelling its popularity.

 

The confidential filing route allows companies to submit their draft red herring prospectus (DRHP) privately to Sebi, stock exchanges, and selectively market it to potential investors. Thus, companies shield sensitive financial and strategic details from the larger public eye until they’re ready to file the red herring prospectus (RHP), which is the precursor to the launch of the IPO.

 

A sense of confidentiality and a longer validity period to go public have made confidential filing an attractive option for companies navigating today’s unpredictable capital markets. The benchmark Sensex and the Nifty are currently in a tailspin due to fears of a global recession, with even the most seasoned analysts finding it difficult to gauge the market’s direction.

 

With up to 18 months to go public after Sebi’s approval, companies can time their listings to align with favourable market conditions, avoiding the pitfalls of premature exposure. Offer documents filed under the traditional route — which must be made public from the word go — get up to 12 months to go public after Sebi’s nod — the so-called final observations.

 

“The additional time allowed after Sebi’s review, by which the IPO should be completed, is longer,” explains Yash Ashar, senior partner at Cyril Amarchand Mangaldas. “This would help in volatile markets and is a big advantage. The route also allows for testing the waters by meeting sophisticated investors, which helps finalise the issue size and other matters.”

 

The extended timeline is particularly valuable, given the low success rate for IPOs, including for some big names. 

 

Cards close to the chest

 

“Forty-five per cent of the companies that file for IPOs drop their listing plans for one or more reasons,” notes Suhana Islam Murshedd, partner at Aquilaw.

 

She points to hotel aggregator Oyo, which filed confidentially in 2023 but backed out without its secrets spilling. 

 

“This route prevents the release of sensitive information to competitors in case it (a company) chooses not to go ahead with the IPO,” she explains. 

 

The ability to withdraw quietly is a powerful draw, especially when markets are unpredictable. Beyond timing, confidentiality shields proprietary data from prying eyes.

 

“It ensures that the review by Sebi and the exchanges is undertaken without competitors reading the disclosures,” Ashar says. For companies with innovative models or unique strategies, this is critical.

 

Archana Balasubramanian, partner at Agama Law Associates, puts it bluntly: “This route is intended for pioneering businesses that do not wish to disclose their business model, margins, key performance indicators (KPIs), and other critical financial information to competitors.”

 

Whether it’s supply chain details or licensing agreements, early disclosure can tip off rivals or spark unwanted scrutiny. It is also not uncommon for IPO-bound companies to attract frivolous litigation and bad press.

 

The fear of exposure is real. 

 

“There is a worry about competitors seeing their books before IPO approvals are in place,” says Ajay Garg, founder of investment bank Equirus. “The DRHP has much larger details about the company and its operations.” Keeping those details private until the last moment can mean staying ahead or losing ground in a cutthroat market.

 

Private dialogue with regulators

 

The confidential route isn’t just about secrecy — it’s about control.

 

“This allows more flexibility on issue structure, including the ability to change both the offered shares and the primary component,” Ashar explains. This iterative approach is a boon for complex deals.

 

It also fosters a private dialogue with regulators. 

 

“If there are certain complex matters and disclosures that Sebi and the exchanges need to review, the same can be done between the issuer and the regulators,” Ashar notes.

 

Ajay Saraf, executive director at ICICI Securities, adds, “Before making their financials public, companies want a bit of certainty. If there are marginal issues that need regulatory attention, that gets sorted out.” This back-and-forth can smooth out wrinkles — like compliance gaps — before they’re exposed.

 

Experts opine that transparency isn’t sacrificed under the pre-filing route. Investors get the full picture once the RHP is filed publicly, blending regulatory rigour with eventual openness. According to Sebi rules, the offer document must be kept in the public domain for 21 days for feedback before the company can launch an IPO.

 

If time is of the essence

 

The confidential route, however, has its trade-offs.

 

“It can be more time-consuming than the traditional process and may result in higher advisory and legal fees,” Murshedd warns.

 

Saraf estimates an extra three to four weeks for approvals, thanks to additional filings like updated DRHPs for public comments. For companies racing to get listed, this delay can sometimes sting.

 

Not everyone buys the argument that this route is a safeguard against volatility.

 

“Worrying about market conditions is not why companies opt for confidential listings,” Garg argues. “If they are worried about the market, they won’t even go about doing the IPO.”

 

He sees it as a matter of regulatory comfort and competitive caution. 

 

Saraf agrees, calling it a niche choice: “People looking for confidential filing are very niche and have a tiny percentage of the overall filing.”

 

The future of filings?

 

That said, the trend is unmistakable. 

 

“A growing number of Indian companies are opting for this route,” says Rajesh Sivaswamy, senior partner at law firm King Stubb & Kasiva. “It allows them to submit draft documents privately, giving more flexibility to address regulatory feedback and time their listing.” 

 

This calculated approach suits companies navigating complex sectors or untested models.

 

Balasubramanian opines: “Given the constant interference from market forces — examining books, questioning business choices, alleging fraud — companies are increasingly looking to go down the confidential filing route.” 

 

She highlights the burden of frequent financial updates in traditional filings, which can expose fresh data if refiling is needed. Confidential filings sidestep this, offering a “larger room to play” amid market swings.

 

As more companies follow Tata Capital’s lead, the confidential route is gaining momentum. “One expects that more and more issuers will choose this option as a regular course,” Ashar predicts. But it’s not a universal fix.

 

“There is no such thing as a better method of filing,” Saraf insists. “It is about the preference of the client and the specific situation.”

 

For now, this route allows issuers to balance ambition with caution. 

 

It offers time to wait out storms, space to refine plans, and a shield against competitors, all while ensuring investors get their due. 

 

As India’s markets grow more complex, confidential filings may become less of an exception, redefining how companies go public in an unpredictable world.