From Merit to Disclosure: The Political Economy of India's IPO Regulation

Shilpi Sharma

doi:10.36948/ijfmr.2026.v08i01.70193

From Merit to Disclosure: The Political Economy of India's IPO Regulation

Author(s)	Ms. Shilpi Sharma
Country	India
Abstract	The shift from the Controller of Capital Issues' (CCI) merit-based capital issues regime to the Securities and Exchange Board of India's (SEBI) disclosure-oriented framework is commonly cited as a pivotal point in the liberalization of the market. The claim is revisited in this publication. It contends that merit regulation was not abolished by the post-1992 IPO environment, but rather moved into institutional, procedural, and informational forms. The paper shows that regulatory screening continues through delegated gatekeeping and eligibility filters by closely examining the SEBI (Issue of Capital and Disclosure Requirements) Regulations, the draft prospectus observation process, merchant banker due diligence requirements, and the legitimating role of qualified institutional buyers. The paper conceptualizes disclosure not as a neutral transparency tool but rather as a governance strategy that regulates access to capital and distributes informational power, placing India's framework within the literature of political economics and law. Furthermore, a comparison with the US and the UK demonstrates that India's preservation of anchor allocations, institutional certification requirements, and profitability thresholds results in a hybrid disclosure–merit regime that differs from the more straightforward disclosure models of developed markets. In terms of investor protection, intermediary accountability, and the governance of capital markets in emerging nations, the paper concludes that India's IPO regulation represents a shift in regulatory authority rather than a retreat.
Keywords	IPO Regulation, Political Economy of Securities Law, gatekeeper liability, Qualified Institutional Buyers (QIBs), Emerging Markets
Published In	Volume 8, Issue 1, January-February 2026
Published On	2026-02-28
DOI	https://doi.org/10.36948/ijfmr.2026.v08i01.70193

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From Merit to Disclosure: The Political Economy of India's IPO Regulation

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