India’s start-up ecosystem is rapidly evolving, and many start-ups are now taking steps to raise capital through Initial Public Offerings (IPOs). In recent years, companies like Swiggy, Meesho, Groww, and PhysicsWallah have opted for the ‘confidential’ IPO filing route.
Interestingly, this route hasn’t been limited to start-ups alone. Even traditional companies such as Tata Capital and Vishal Mega Mart have adopted it. This article explores what the confidential route is, its advantages and challenges, and what it means for investors.
What Is the Confidential IPO Filing Route?
The confidential IPO filing route is an alternative process introduced by SEBI in November 2022. Under this route, companies submit their Draft Red Herring Prospectus (DRHP) confidentially to SEBI without making it public. In the regular IPO process, the DRHP must be published immediately, but in the confidential route, it remains private until the company is ready to launch the IPO.
Tata Play became the first Indian company to use this route in December 2022. This process allows companies to protect sensitive information during the early stages of the IPO journey.
Confidential Route: A Preferred Choice for Start-ups?
The biggest advantage of confidential filing is the privacy it provides around sensitive business information. The DRHP includes financial data, business strategies, legal matters, and key performance indicators (KPIs), all of which can be valuable to competitors. Start-ups — especially new-age tech companies like Meesho and Zepto, whose business models are still evolving — choose this route to safeguard their strategies.
The share of confidential filings has grown noticeably, rising from just 2% in 2023 to 10% by May 2025.
Another key advantage is that if market conditions turn unfavourable, a company can postpone or withdraw the IPO without facing public scrutiny or reputational damage.
SEBI has set clear timelines for both IPO routes. If a company chooses the pre-filing (confidential) route, it must launch the IPO within 18 months of receiving SEBI’s initial observations. Under the regular route, the IPO must be launched within 12 months of receiving the final observations.
Challenges in the Confidential Route
Despite its advantages, the confidential filing route comes with its own set of challenges. The process can be more complex and time-consuming than regular filing because it involves additional documentation and audits. This leads to higher legal, banking, and compliance costs. Moreover, limited access to information can increase the risk of insider trading.
Companies are also restricted in their ability to market the IPO. They can only engage in limited marketing with Qualified Institutional Buyers (QIBs), and broader promotions cannot begin until the updated DRHP is made public.
So far, only eight companies in India have opted for this route: Tata Capital, boAt, Swiggy, Vishal Mega Mart, PhysicsWallah, Tata Play, Oravel Stays (OYO), and Aequs.
What Does It Mean for Investors?
For investors, the confidential filing route means that IPO-related information is made available later in the process. In the regular route, once the DRHP is filed publicly, investors get at least 21 days to review the company’s financials and business details. However, in the confidential route, by the time the RHP is made public, investors may have less time to analyse the information and make informed decisions. This could make the investment decision slightly more challenging.
That said, the route remains appealing for companies that want to protect their strategies and maintain flexibility.
What’s Next?
The confidential IPO filing route is slowly gaining traction in India, much like in developed markets such as the US, UK, and Canada. At the start of 2025, 23 start-ups were in various stages of IPO preparation, including Zepto, PhonePe, Pine Labs, and Lenskart. India’s strong equity markets and the growing investor interest in new-age technology companies could further accelerate this trend.
However, market volatility and geopolitical uncertainties may still pose hurdles. Even so, the confidential route offers companies the benefits of flexibility and discretion, which could make it an increasingly preferred choice in the years to come.
*The companies mentioned in the article are for information purposes only. This is not investment advice.
*Disclaimer: Teji Mandi Disclaimer
