How Sebi move helps employees cash out Esops

A pre-IPO trading platform, proposed by the Securities and Exchange Board of India (Sebi), could unlock liquidity for employees holding stock options (Esops) and early-stage investors. Mint examines why this proposal matters and what it could change for Esops.

- BY NEHA JOSHI

1 What did Sebi chair say, and why now?

Sebi chairperson Tuhin Kanta Pandey recently suggested creating a regulated venue where shares of IPO-bound companies could trade among private investors before listing, under clear rules. The timing is significant: India's IPO market raised nearly 4.3 trillion in FY25, with more listings ahead. Outside formal exchanges, however, early investors and employees with stock options (Esops) struggle to cash out, relying on the grey market an informal, legally uncertain channel. The markets regulator wants to replace these risky trades with a transparent, supervised system.

2 What problems exist today?