New Delhi, March 27 -- Confidential IPO filings are reshaping India's primary markets, balancing transparency with strategic flexibility in an increasingly volatile environment
Zepto, the quick commerce giant, filed for its IPO in December 2025, while fintech leader PhonePe received approval for its IPO in January 2026. In both instances, their Draft Red Herring Prospectus (DRHP) was not made accessible to the public during the SEBI approval process. After obtaining SEBI's approval, PhonePe submitted a revised DRHP on January 21, 2026, which was then made available to the broader investor community.
This raises an important question: are these companies concealing information, or simply withholding certain information initially, unlike other IPO-bound firms whose DRHPs are published immediately? This development highlights a growing trend of confidential IPOs, signalling a shift in the listing processes of Indian capital markets.
Traditionally, going public in India required full disclosure from the outset. Once a company filed a standard DRHP, key financial and operational data became publicly available. This often led to discomfort, particularly amid rising global uncertainty that makes IPO windows unpredictable. Between 2018 and 2025, over 94 companies filed DRHPs but later chose not to list, revealing sensitive information without deriving any benefit. To address this, SEBI introduced the confidential pre-filing mechanism in November 2022, allowing companies to complete most regulatory checks privately. This practice is common in the US, especially following the 2012 JOBS Act, and has since been widely adopted.
Founders prefer this approach as it safeguards sensitive data during vulnerable growth stages. For Zepto, for instance, disclosing dark-store economics while competing with Blinkit, Swiggy, Instamart and others could offer rivals a strategic advantage. It also allows companies to 'test the waters' with institutional investors, helping them assess valuations through private negotiations. If institutions raise concerns about high valuations, firms can recalibrate their public offering price, avoiding visible valuation corrections that could undermine retail investor confidence.
Confidential filings also separate regulatory preparedness from market timing, enabling firms to wait for favourable macroeconomic conditions or resolve governance issues discreetly. However, this approach comes with trade-offs: increased legal, audit, and banking expenses due to documentation complexity, limited early-stage marketing, and reduced time for market scrutiny, potentially leading to negative sentiment post-listing.
Using confidentiality where it is unnecessary may lead retail investors to suspect that unfavourable information is being concealed. A cautionary example is WeWork, which submitted a confidential filing in the US with a $47 billion private valuation. When its documents were eventually released, they exposed questionable metrics and weak governance, damaging the company's reputation and resulting in the withdrawal of its IPO. This underscores that confidential phases should be used to resolve issues, not to avoid responsibility. In contrast, India's Paytm went public in 2021 with a $20 billion valuation, but its stock fell 27% on listing day, highlighting the potential value of a more calibrated, confidential approach.
Approximately 26 Indian companies have opted for confidential filings, with around eight successfully raising funds. These companies are largely concentrated in technology, fintech and emerging sectors, prioritising flexibility and strategic timing, and are often in early growth stages. In contrast, sectors such as manufacturing, infrastructure, and financial services continue to prefer traditional DRHP filings, which can reduce costs by around 20%.
Companies opting for the confidential route typically have shorter market engagement periods prior to listing, which may result in lower subscription levels. Early data suggests this trend exists in both confidential and traditional IPOs. While traditional IPOs tend to see higher subscription rates, averaging 57.02x compared to 30.34x for confidential filings, this does not necessarily translate into superior listing performance. In fact, confidential IPOs have delivered stronger listing gains on average, 24.94% versus 17.82%, suggesting that a more measured and private approach may support better post-listing performance.
The widespread adoption of confidential IPO filings in the United States stems from a mature regulatory framework that encourages innovation and adapts to market volatility. India's relatively slower adoption reflects its traditional emphasis on transparency and its unique investor base. However, as India's capital markets evolve, and as more IPOS emerge from technology and start-up ecosystems, the confidential filing route is likely to play an increasingly prominent role in shaping the future of listings.
NOTE: No TechCircle journalist was involved in the creation/production of this content.
Published by HT Digital Content Services with permission from TechCircle.