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A Wrong Quota

Financial Express Lucknow

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August 11, 2025

Sebi's proposal to reduce retail subscription in large IPOs comes at a wrong time

The Securities and Exchange Board of India's (Sebi) recent proposal to reduce retail subscription from 35% to 25% in a gradual manner in large initial public offerings (IPOs) is well-intentioned but illogical. Since 2024, only three IPOs of over ₹5,000 crore (out of nine)—Hyundai Motors, Hexaware Technologies, and Afcon Infrastructure—did not get full retail subscription, according to data from Prime Database. The latter almost made it at 0.94%. Over the past 20 years, 32 IPOs raised over ₹5,000 crore, and 18 of them were fully subscribed by retail investors, and some even more. If one takes 75% as a benchmark, 22 of them qualify—not a bad number for a country that has much less than 10% of its population investing in equities directly.

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