DayStarter

Market snapshot

Equities: 1 September close

The Nifty opened almost flat at 24,078 and closed at 24,055.80, around 22 points below its opening level. During the first hour, it fell towards the 24,020 to 24,025 range. It then recovered and reached around 24,130 to 24,140 near 11:30 AM.

The index later fell to around 23,950 to 23,960 shortly after 2 PM. A move during the closing auction session took it back above 24,050.

The Nifty 50 touched an intraday high of 24,143.15 and a low of 23,952.55. The Sensex moved between a high of 77,231.87 and a low of 76,656.12.

Sector performance

IT and FMCG were the strongest sectors. Nifty IT rose 0.98%, while Nifty FMCG rose 0.94%.

Banks, autos, consumer durables, realty and pharma ended lower. Nifty Pharma was the weakest of the listed sectors, falling 1.45%.

F&O winners and losers

Among F&O stocks, ITC was the top gainer, rising 4.34%. KEI was the biggest loser, falling 6.84%.

Commodities

Crude oil rose 2.09% on MCX. Gold, silver, natural gas, copper and aluminium ended lower.

Currency and bond yields

The rupee closed at 95.02 against the US dollar, compared with 95.24 in the previous session. US and Indian 10-year government bond yields both moved higher.

Institutional flows

Both foreign institutional investors, or FIIs, and domestic institutional investors, or DIIs, were net buyers on 1 September. Across the last five sessions, however, FIIs were net sellers of ₹11,678 crore. DIIs were net buyers of ₹23,022 crore.

The macro view

GST collections and refunds

India’s gross goods and services tax collections rose 14.8% year-on-year to ₹1.99 trillion in August, from ₹1.74 trillion a year earlier. Provisional finance ministry data showed that collections from imports contributed significantly to the increase.

August collections were below the ₹2.11 trillion collected in July. July was the second month in which GST collections crossed ₹2 trillion. The record remains ₹2.43 trillion in April 2026. June collections were ₹1.95 trillion.

Gross domestic GST revenue increased 9.3% to ₹1.37 trillion from ₹1.25 trillion a year earlier. GST collected on imports rose much faster, increasing 29% to ₹62,604 crore from ₹48,546 crore.

Refunds also rose sharply. Total refunds increased 67.9% to ₹31,795 crore from ₹18,935 crore a year earlier. Domestic refunds rose 72.6% to ₹18,490 crore. Export GST refunds processed through the ICEGATE platform increased 61.8% to ₹13,305 crore.

Domestic refunds are driven largely by inverted duty structures. This is a situation where taxes on inputs are higher than taxes on the final output.

Mint

Manufacturing activity and national accounts

India’s seasonally adjusted HSBC Manufacturing PMI fell for the third consecutive month, from 53.5 in July to 52.8 in August. The PMI survey described this as the weakest improvement in the health of the manufacturing sector in five years. The reading was also below the long-run average of 54.2.

Business momentum weakened because growth in output and new orders slowed to five-year lows. Input inflation fell to its weakest level in six months. Inflation in prices charged by manufacturers was slight and the slowest in 45 months. Employment in manufacturing contracted for the first time in more than two years.

Around 16% of survey participants expected output to be higher over the next 12 months. The remaining participants expected no change from current levels. At the same time, the PMI’s Future Output Index rose to its highest level since May.

Real GDP grew 7.8% year-on-year in Q1FY27, above the Bloomberg consensus estimate of 7.3%. Growth was led by higher fixed investment, private consumption and manufacturing.

Nomura Research identified four headwinds for H2FY27. It also warned that cuts in government expenditure could create a 20 basis point slippage in the FY27 fiscal deficit target of 4.3% of GDP.

Mint

External sector and tax administration

India recorded a current account deficit of $4.2 billion, or 0.5% of GDP, in Q1FY27. This compares with a revised deficit of $3.4 billion, or 0.4% of GDP, in Q1FY26. The current account records the country’s transactions with the rest of the world, including trade, services and transfers.

More than 78 million income-tax returns had been filed for assessment year 2026-27 as of 31 August. The date was the statutory deadline for taxpayers with business or professional income whose accounts were not required to be audited for AY27.

The Directorate General of Foreign Trade has introduced automated issuance of free sale and commerce certificates through its portal. The change was enabled through Trade Notice No. 24/2026-2027 dated 31 August.

Credit growth in metropolitan centres rose to 13.1%, compared with 8.2% a year earlier. Growth was still lower than in non-metro centres, where credit increased by more than 21%, according to RBI data.

Mint; RBI

Administered prices: fuel and sugar

State-run oil marketing companies raised prices of commercial LPG cylinders by around ₹10 per cylinder across major metro cities. Jet fuel prices for domestic airlines were increased by more than 5%.

The 19-kg commercial LPG cylinder in New Delhi became ₹9.5 more expensive at ₹2,747.50. The 5-kg free trade LPG cylinder rose by ₹2 to ₹764. Commercial LPG prices were ₹2,884 in Kolkata, ₹2,701 in Mumbai and ₹2,916.50 in Chennai. These represented increases of ₹11.5, ₹9.5 and ₹10.5 respectively.

The increases followed higher international LPG prices. Benchmark Saudi Contract Prices increased by $5 per tonne for propane and $20 per tonne for butane over the past month. India imports around 65% of its annual LPG requirement of 33 million tonnes, with an import bill of nearly $11 billion. Domestic LPG prices were kept unchanged.

The government also changed windfall taxes on fuel exports for the next fortnight. The tax on petrol exports was raised by ₹1.5 per litre, while the tax on diesel exports increased by ₹1 per litre. The tax on jet fuel exports was reduced by 50 paise per litre.

The Centre also changed the allocation system for the remaining 202,550 tonnes of raw sugar imports under the tariff rate quota. The remaining quota will now be allocated daily instead of through the one-time system used for the initial quota.

Average retail sugar prices rose 37.5% over the year, from ₹46.02 per kg to ₹63.28 per kg as of 31 August. The government has responded with tighter stockholding rules:

• The stockholding limit for sugar dealers will be cut from 4,000 quintals to 2,000 quintals from 15 September to 30 November.
• From 1 September, bulk consumers cannot hold sugar stocks equal to more than 15 days of consumption.

States and sugar mills have been advised to start crushing from 15 October 2026. The government expects October sugar production to rise from the usual 300,000 to 400,000 tonnes to more than 1 million tonnes.

Current-season sugar production is estimated at around 30.6 million tonnes, below the original estimate of about 34.3 million tonnes. The shortfall has been linked to red rot, top borer disease and waterlogging. Applications for 797,450 tonnes have already been received against the original import quota.

Mint

Infrastructure, energy and payments

India’s power consumption rose 12.85% year-on-year to 169.01 billion units in August, from 149.76 billion units in August 2025. High humidity increased the use of cooling appliances. Peak power demand also rose, reaching 258.27 GW compared with 229.72 GW a year earlier.

Transactions through the Unified Payments Interface reached ₹29.8 trillion in August. This was close to the record ₹29.9 trillion reached in May and July 2026. UPI transaction volumes reached a new high of 24.51 billion in August, up from 23.66 billion in July.

India has also resumed talks with Zambia about possible investments in copper and other critical minerals. Officials from India’s ministry of mines held preliminary discussions with Zambian officials on 26 August.

Mint; NPCI

Labour market and financial institutions

Attrition among clerical staff at regional rural banks rose to 39.2% in 2025 from 23.1% in 2023. Overall attrition across RRBs remained at 3% to 6% for clerks and 2% to 3% for officers.

A government presentation also showed that 17 RRBs had not yet started promotions, while four had not completed the promotion process.

Mint

Corporate action and earnings

Deals and M&A

• Happiest Minds Technologies said its stake sale to ITC Infotech was not driven by concerns about artificial intelligence. The combined company would have had revenue of around $740 million as of March 2026.
• Founding chairman Ashok Soota will sell an 11% stake in the first tranche at ₹390 per share and another 11% at ₹400 per share. The two tranches are valued at about ₹1,330 crore. Both prices are below Happiest Minds’ Monday closing price of ₹407, when the acquisition was announced. Happiest Minds shares have fallen more than 21% so far this year, including an 11% fall on Tuesday.
• The National Company Law Tribunal stayed an earlier order approving Zee founder Subhash Chandra’s ₹6.5 crore repayment plan. A five-member special bench led by NCLT president Justice Anupinder Singh Grewal said that the order issued by member Nilesh Sharma on 25 August could not take effect because it did not represent the majority view of the tribunal.
• Chandra’s proposal involves a ₹6.5 crore payment. Of this, ₹6.25 crore would go to creditors and ₹25 lakh would cover insolvency process costs. Creditors representing 80.81% by value supported the plan. The tribunal also stopped Chandra from selling or transferring property held by him while the matter is pending. The next hearing is scheduled for 23 September.
• Sun Pharmaceutical Industries signed an agreement with the US government on 31 August, together with eight other mid-sized pharmaceutical companies. The companies agreed to lower prices of innovative drugs in the US under the most favoured nation pricing framework. Sun Pharma will also avoid tariffs on innovative pharmaceutical products for more than two years.
• Sun Pharma and the eight other drugmakers will collectively invest at least $19.6 billion in US manufacturing in the near term, according to a White House fact sheet. Sun Pharma will contribute 71.4 tonnes of clindamycin and 6.75 tons of doxycycline to the Strategic Active Pharmaceutical Ingredients Reserve. Sun Pharma shares closed 2.9% lower at ₹1,927.20 on the NSE on Tuesday.
• IPO-bound Parle Products appointed FMCG veteran George Kovoor as chief executive officer. Parle reported FY25 revenue of ₹18,209.2 crore, up 7% year-on-year. Profit fell by one-third to ₹1,182 crore. The company has not yet reported its FY26 financial results.
• GoPro said it is being acquired by Starman Optical in an all-cash transaction valued at $285 million. GoPro shareholders will receive an aggregate cash payment of about $1.14 per share and retain roughly 10% ownership of the combined company. The deal represents a 29.5% premium to GoPro’s last closing price.
• WeWork India signed a 141,392 sq ft managed-office deal with Cognizant Technology Solutions India in Chennai. The space covers two floors at Embassy Splendid TechZone and can accommodate 2,605 seats. The agreement is for 24 months at around ₹14,000 per seat per month.
• Edtech company upGrad, led by Ronnie Screwvala, paid $200 million to acquire Unacademy. This was a fraction of Unacademy’s peak valuation of $3.44 billion.

Mint

Startups, technology and funding

• Deeptech companies have raised $2.3 billion across just under 200 deals so far this year, according to Tracxn. This compares with $1.62 billion across 453 deals during all of 2025. Venture Intelligence data showed that at least six of the ten largest deeptech deals this year were rounds of $30 million or more from private equity and venture capital investors.
• Battery-swapping joint venture Yuma Energy raised $35 million in an internal Series A round from Magna International. When Yuma launched, Magna and Yulu had together invested $77 million.
• Energy-storage technology companies raised $270 million across 74 deals in 2025 and $305 million across 37 deals so far this year. Funding peaked in 2024 at $429 million across 80 deals.
• ICICI Bank-backed startup AdvaRisk is in talks to raise $20 million to $25 million, or around ₹190 crore to ₹237.5 crore, from investors including Fundamentum. Fundamentum launched its third fund, Fundamentum Frontier Advisors, in May. It is a ₹3,000 crore fund headed by co-founder and general partner Ashish Kumar.
• Bengaluru-based Oppex AI raised ₹4.2 crore in a pre-seed round from Info Edge Ventures.
• Wipro is rolling out productivity-tracking software called TimeScope on company-issued devices. It was installed for 5,000 employees from around May and is now being expanded to more employees.
• OpenAI said in a late-night legal filing published Monday that Apple had filed a baseless lawsuit in an attempt to restrict OpenAI’s ability to recruit employees. OpenAI cited 400 employees who had left the iPhone maker to join OpenAI.
• Dyson introduced a $499 toothbrush that uses artificial intelligence and a built-in camera to provide real-time feedback. It was announced on Tuesday and is available for preorder.

Mint; Tracxn; Venture Intelligence

Operating updates and results

• Maruti Suzuki’s total sales rose 21.3% year-on-year in August to 219,220 vehicles. Sales fell 9.2% from the previous month, which the company attributed to fewer working days. Mahindra & Mahindra, Hyundai Motor India and Tata Motors Passenger Vehicles reported year-on-year sales growth of 42%, 8.8% and 56% respectively.
• Tata Motors reported a 49% year-on-year increase in total commercial vehicle sales to 44,411 units in August. Domestic commercial vehicle sales rose 33% to 36,619 units.
• Royal Enfield sold 1.26 lakh motorcycles in August, up 11% year-on-year. Domestic sales rose 11% and exports increased 10%. Year-to-date sales rose 23% to 5.75 lakh units, helped by a 28% increase in domestic sales. Exports over the same period fell 9%.

• Coal India’s production fell 5.7% year-on-year to 47.5 million tonnes in August, while offtake rose 5.5% to 60.6 million tonnes. Production between April and August fell 4.5% year-on-year to 267.5 million tonnes.
• Coal India’s supplies rose 5.5% to 60.60 million tonnes in August from 57.40 million tonnes a year earlier. Supplies to the non-regulated sector increased 9.6% to 12.12 million tonnes. Total supplies during April to August rose 6.7% to 322.90 million tonnes from 302.60 million tonnes.
• Meesho’s annual transacting sellers rose 87% year-on-year to 961,000 in FY26 from 515,000 a year earlier. The number reached 1.04 million in Q1FY27, up 81%. Its consolidated net loss narrowed to ₹132 crore in Q1FY27 from ₹290 crore a year earlier. Revenue from operations increased 48% to ₹3,713 crore, while net merchandise value rose 34% to ₹11,614 crore.
• Meesho Mall crossed 1,200 brands in Q1FY27. Mall transacting consumers rose 88% year-on-year and Mall net merchandise value increased by about 93%.
• United Breweries announced a ₹110 crore investment in a new canning facility at its Ellora brewery in Maharashtra. This is its second such investment this year. Premium products contribute around 10% of UBL’s business. Cans account for about 20% of national sales, while bottles contribute close to 80%.
• Moody’s projected that data centres would add only 0.13% to India’s GDP by 2030 and increase employment in India by 0.02% over the next four years. India is expected to become the world’s third-largest economy by 2030, with projected GDP of $7.3 trillion. Moody’s expects data centres to account for less than 5% of net national power consumption by 2030.
• The Central Consumer Protection Authority flagged 5,008 consumer complaints against Eureka Forbes related to water purifiers and after-sales service. It fined the company ₹5 lakh. Eureka Forbes reported Q1FY27 revenue of ₹700.8 crore, up 15.3% year-on-year.
• Ujjivan Small Finance Bank said chief executive officer Sanjeev Nautiyal stepped down with immediate effect because of health issues and will retire at the end of November. The RBI approved executive director Carol Furtado as interim CEO from 1 September.
• Reliance Consumer Products launched a new ice cream brand, Bombay Creamery. Products start at ₹10. The brand is currently available in western India and is expected to be rolled out across the country.
• JioHotstar launched in the UK, Canada and Singapore. It plans to add more than 30,000 hours of content each year.
• General Insurance Corporation of India’s domestic business contributed around 75% of its ₹44,006.74 crore gross premium income in FY26. GIC Re’s domestic combined ratio rose to 107% in the June quarter from 102% in FY26. Its consolidated combined ratio for FY26 was 106.02%, compared with 108.81% in FY25.
• Foreign airlines’ share of passengers flying out of India rose to 60.3% from 54% a year earlier. Domestic airlines’ share fell to 39.7% from 46% in January to June 2026. Indian carriers operated 87,768 international departures during the first half of 2026, down 19% from 107,882 a year earlier.

Mint; Reuters

Primary and secondary market activity

The Sensex and Nifty gained only 0.6% and 0.9% respectively over the last two months, even though foreign portfolio investors put ₹50,000 crore into the market during the period.

The pattern differed sharply between primary and secondary markets. FPIs have invested a net ₹45,711 crore in India’s primary markets so far in 2026, while withdrawing nearly ₹2.7 trillion from secondary markets.

The combined value of IPOs, qualified institutional placements and secondary-market block trades reached almost ₹1.07 trillion in August. This was the highest monthly level so far this year. Block deal value rose 63% from July to nearly ₹80,000 crore in August, the highest monthly value in 14 months.

Companies raised ₹22,406 crore through IPOs and ₹5,450 crore through QIPs during August. Together, these represented almost 40% of the ₹29,361 crore that FPIs invested on a net basis in Indian equities during the month. In July, IPOs worth ₹29,648 crore and QIPs worth ₹25,114 crore added to market supply. Bulk and block deals added another ₹48,454 crore.

Amit Ramchandani, head of investment banking at Motilal Oswal, expects total public-market fundraising to rise to a record ₹6 trillion to ₹6.5 trillion in FY27. He expects IPO fundraising to increase to ₹2.75 trillion to ₹3 trillion from around ₹1.7 trillion in FY26. QIP fundraising is expected to roughly double to ₹1.25 trillion to ₹1.5 trillion from ₹60,000 crore to ₹62,000 crore last year.

Since SEBI’s new closing auction session mechanism began on 3 August, Bank Nifty futures volumes had fallen around 41% to 14,484 contracts as of 31 August. Traded value also fell 41% to ₹2,512.95 crore. Nifty futures volumes fell 8% to 51,118 contracts, while traded value declined 9% to ₹8,056.79 crore. The closing auction mechanism applies to 213 derivative-traded stocks.

Auto parts maker Victura Technologies has also started discussions with investment banks about a possible IPO in India. The offering could raise as much as $300 million through a combination of new shares and shares sold by existing investors.

Mint; Prime Database

Upcoming events

Economic calendar

These are scheduled releases, not confirmed outcomes.

Other scheduled dates

• Deepa Jewellers Limited’s bid or offer closes on Thursday, 3 September 2026. The price band is ₹168 to ₹177 per equity share with a face value of ₹2. The shares are proposed to be listed on the main boards of BSE and NSE. The anchor investor bid or offer period was Monday, 31 August 2026, and the bid or offer opened on Tuesday, 1 September 2026.
• The United Forum of Bank Unions has decided to hold a nationwide strike on 11 September over delays in implementing five-day banking and several other pending demands. UFBU has also threatened a three-day nationwide strike beginning 28 September and an indefinite strike from 26 October if its demands are not met.
• India is set to host the BRICS summit on 12 and 13 September.
• The NCLT will next hear the Subhash Chandra repayment-plan matter on 23 September. The NCLAT listed the creditors’ challenge for Wednesday.
• Sashidhar Jagdishan is scheduled to step down as managing director and chief executive of HDFC Bank on 26 October.

Mint

Global pulse

Global markets

Major global equity indices ended lower.

Global bonds, currencies and commodities

Global bond yields rose sharply. Japan’s 10-year government bond yield reached 3% for the first time since 1996. The move was part of a broader global bond selloff, driven by higher inflation concerns linked to oil, expectations of further monetary tightening and concerns about worsening fiscal conditions.

The UK 30-year yield reached its highest level since 1998. The US 10-year Treasury yield reached levels last seen in January 2025. The yield on Bloomberg’s gauge of global sovereign bonds rose to 3.72%, its highest since mid-2008. Bloomberg’s global debt gauge has fallen 0.9% so far this year after gaining 6.8% in 2025.

Markets are pricing an almost 70% probability that the US Federal Reserve will raise rates by 25 basis points at its meeting this month. Economists at Barclays Plc and Societe Generale SA changed their Federal Reserve forecasts after Federal Reserve Chairman Kevin Warsh’s speech on Friday.

Oil prices also moved higher as US-Iran tensions returned. WTI crude rose to around $88 per barrel after gaining 2.8% on Monday. Concerns centred on possible prolonged disruptions to energy shipments through the Strait of Hormuz. Brent crude moved above $91. Brent futures rose another 1.3% on Tuesday.

Two supertankers carrying Saudi oil were struck by unknown projectiles within minutes of each other while leaving the Strait of Hormuz late on Monday, according to shipping intelligence and tracking firms Marisks and Kpler.

The US dollar strengthened, while the Japanese yen weakened beyond 160 per dollar. Higher oil prices also increased inflation concerns and added to the global bond selloff. Gold fell more than 1% to around $4,375 per ounce, its lowest level since 19 August, as US Treasury yields rose to their highest level since January 2025.

Zerodha AfterMarket Report; Bloomberg; Reuters

Geopolitics and international macro

Iran said it would reciprocate if the US honoured its commitments under a June interim agreement to halt their conflict. The statement came after US President Donald Trump threatened Tehran with further strikes. Iranian President Masoud Pezeshkian made the comments in Bishkek during a Shanghai Cooperation Organisation summit.

Iran’s central bank governor, Abdolnaser Hemmati, said Tehran had sufficient foreign currency reserves and that the central bank was prepared to inject up to $2 billion into the foreign exchange market. The statement was quoted by the semi-official Tasnim news agency.

Prime Minister Narendra Modi urged the SCO to confront countries that use terrorism as an instrument of state policy and to reject double standards. The Bishkek Declaration issued at the end of the summit expressed deep concern about developments in the Middle East and repeated the SCO’s condemnation of military strikes on Iran.

Rescue teams continued searching for thousands of people missing after floods hit communities across the Himalayas. More than 1,000 people have died. Nepal’s disaster agency reported 1,003 deaths and 3,916 missing people, including 583 foreign nationals. China reported 16 deaths and 546 missing people, including 261 foreigners. At least 11,814 people have been rescued so far, according to Nepalese authorities. Around 900 workers are missing from 12 hydropower projects in Nepal. Local authorities believe roughly 500 of them may be trapped inside tunnels.

BYD delivered 440,293 vehicles in August, up 17.8% year-on-year. This was the company’s fourth consecutive month of sales growth.

Apple shares have risen 2,275% since Tim Cook became chief executive on 24 August 2011. On a total-return basis, they have risen 2,736%. Apple is now valued at $4.6 trillion. Apple Services generated more than $109 billion in fiscal 2025, representing more than one-quarter of total sales. In fiscal 2013, the segment generated $16 billion, or 9.4% of total sales. Apple’s revenue increased from $157 billion in fiscal 2012 to $416 billion in the most recent period. Fiscal 2026 revenue is expected to reach $477 billion. The company has spent more than $840 billion on share buybacks since fiscal 2012. Its outstanding share count has fallen by nearly 45% from its 2012 peak.

Mint; Bloomberg

Monthly global data wrap

The balance of global economic output has continued to shift. In 2010, the G7 accounted for 49.5% of global GDP, compared with 21.7% for the original BRICS members. By 2026, the G7 share had fallen to 43.8%, while BRICS+ accounted for 29.1%.

Inflation trends differed across major economies:

• China’s retail inflation fell to 0.5% in July from 1.2% in April and May.
• South Korea’s inflation fell to 2.8% from 3.2% in June.
• Brazil’s inflation declined to 4.4% in July from 4.7% in May.
• India’s inflation rose from 2.7% in January to 4.5% in July.
• Japan’s inflation increased from 1.5% to 1.9%.
• US inflation was 3.4% in July.

In South Asia, nearly eight out of every ten unemployed young people in 2025 were entering the labour market for the first time. The share was 79.6% in South Asia, compared with 45.1% globally, 60.2% in sub-Saharan Africa and 45.8% in Southeast Asia and the Pacific. South Asia’s share increased from 64.8% in 2016 to 79.6% in 2025.

The World Bank’s World Development Report 2026 also showed large differences in exposure to artificial intelligence across labour markets. In low- and middle-income countries, 52.7% of employment is in occupations with the least AI exposure, compared with 24.1% in high-income economies. Jobs with the most AI exposure account for 23.1% of employment in low- and middle-income countries, compared with 29.5% in high-income economies. Occupations with significant or the highest exposure account for 39% of employment in low- and middle-income economies, compared with 57% in high-income economies.

A Pew Research Center survey across 37 countries found that a median 55% of respondents viewed the United Nations favourably, while 37% viewed it unfavourably. In India, 40% viewed the UN favourably and 18% viewed it unfavourably. Sweden had the highest favourable rating at 74%. The survey covered 45,658 people across 37 countries.

World Bank; International Labour Organization; Pew Research Center

Management commentary

On engineering R&D and AI

Nasscom projects that global engineering research and development spending will reach $2.48 trillion to $2.50 trillion by 2030, growing at a compound annual growth rate of 8% to 9% between CY24 and CY30. India’s ER&D services revenue is estimated at $63 billion in FY26 and is projected to cross $100 billion by 2030.

On GST refunds and the inverted duty structure

The comment referred to the 67.9% rise in GST refunds.

On attrition at regional rural banks

On the closing auction session mechanism

The comment referred to SEBI’s closing auction session mechanism.

On common security

Feature: Reading the DRHP, what to actually focus on

A draft red herring prospectus, or DRHP, can easily run beyond 300 pages. Six sections help explain where the money will go, who is behind the company, what the financial history looks like, what risks exist, who entered as anchor investors and how much of the IPO is a fresh issue versus an offer for sale. This feature explains what the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 require these sections to contain, drawing entirely on publicly available, non-paywalled secondary sources and the regulations themselves. It explains the structure of IPO disclosures and does not express a view on any issue, issuer or security.

What SEBI reviews

SEBI regulates the disclosure framework for offer documents. It does not judge whether an issue is commercially attractive. SEBI reviews draft offer documents and can ask for additional disclosures or clarifications. Its observations should not be treated as approval or endorsement of the IPO. The main areas it reviews are:

• Risk factor disclosures
• Pending litigation and regulatory proceedings
• Financial information
• Related-party transactions
• Promoter and promoter-group disclosures
• Business operations and industry disclosures
• Use of issue proceeds
• Compliance with securities laws

Investors remain responsible for assessing the risks and merits of an investment using the disclosures in the offer document.

1. Use of proceeds: where the money actually goes

The Objects of the Issue section explains how the company plans to use the money raised. In a fresh issue, the company creates new shares and receives the money. Common uses are expansion, debt repayment and working capital.

The ICDR Regulations define general corporate purposes, or GCP, as purposes identified by the company for which no specific amount has been allocated in the offer document. For main-board IPOs, the GCP portion cannot exceed 25% of total issue proceeds. For SME IPOs, it cannot exceed 15% of total issue proceeds or ₹10 crore, whichever is lower.

Some offer documents had GCP allocations of 25% to 35% of the total issue size with only a single broad statement explaining the use. SEBI and stock exchanges observed cases where such funds were used for:

• Inter-corporate loans to related-party entities
• Buying assets that were not disclosed in the offer document
• Repaying informal shareholder loans that were not disclosed as debt
• Unrelated diversification
• Keeping the money in fixed deposits that generated returns significantly below the cost of capital

The review process has become more detailed. In recent DRHP reviews, both BSE and NSE have asked companies to explain how GCP funds are expected to be used. Instead of accepting one broad statement, exchanges have asked for category-level details such as working capital, marketing spending or strategic reviews.

The 2022 caps and monitoring regime

Regulation 2(1)(r), read with Regulation 7(2) of the ICDR Regulations, allows issuers to allocate up to 25% of the fresh issue size to general corporate purposes. The ICDR Amendment Regulations effective from 14 January 2022 introduced additional restrictions:

• The amount raised for unidentified inorganic acquisitions or strategic investments together with general corporate purposes cannot exceed 35% of the total amount raised.
• The amount set aside specifically for unidentified future inorganic growth cannot exceed 25% of the total amount raised.
• These caps do not apply when the acquisition or investment target has already been identified and disclosed in the DRHP or RHP.

Regulation 41 requires issuers to appoint a monitoring agency to track how IPO proceeds are used. The 2022 amendment made four changes to this system:

• Only SEBI-registered credit rating agencies can act as monitoring agencies. Previously, scheduled commercial banks and public financial institutions could also perform this role.
• Monitoring now covers all issue proceeds instead of the earlier 95%.
• Funds used for general corporate purposes must also be monitored and disclosed in the monitoring agency report.
• The monitoring report must be placed before the issuer’s audit committee every quarter instead of once a year.

2. Promoter background: who is running the company

The ICDR Regulations set eligibility conditions not only for the company but also for its promoters and directors. A company cannot make a public issue if:

• The issuer, its promoters or its directors have been debarred by SEBI from accessing the capital market.
• A promoter or director is also a promoter or director of another company that has been debarred.
• A promoter or director is a fugitive economic offender.

Separate disclosure requirements apply when the issuer or any promoter or director is a wilful defaulter. SEBI’s October 2020 board paper lists promoter disclosures such as actions taken by regulatory and statutory authorities and disciplinary actions, including penalties imposed by SEBI or stock exchanges. Because the ICDR eligibility test also applies to other companies in which a promoter or director holds the same role, the promoter’s record at other businesses is also relevant.

3. Financial summary: three years, not one

The offer document must provide a broader financial history rather than focusing only on the latest year. The KPMG ICDR checklist includes disclosures on:

• The objects of the issue and total funding requirements
• An undertaking confirming firm financing arrangements through verifiable means for 75% of the stated means of finance, excluding funds to be raised through the proposed issue and internal accruals
• Details of project appraisal
• Financial information covering the past three years
• Capital expenditure
• Cash flow
• Liquidity

The checklist also separately requires disclosure of material developments since the latest balance sheet date. Pending litigation involving the company, promoters, promoter group, directors or group entities must also be disclosed, along with outstanding dues to creditors.

4. Risk factors: skim for the unusual

Risk factors are a compulsory section in every DRHP. The ICDR Regulations also govern which legal matters are considered material enough to require disclosure. The DRHP must contain a dedicated “Legal and Other Information” section covering pending litigation, regulatory action and material dues. This requirement comes from Clause 12 of Part A of Schedule VI of the ICDR Regulations.

Companies use a board-approved materiality policy to decide which litigation must be disclosed. Where applicable, the ICDR thresholds are:

• At least 2% of turnover
• At least 2% of net worth based on the latest consolidated financial statements
• At least 5% of the average absolute profit after tax over the previous three years

The disclosures can include all criminal cases involving the company, directors, promoters and subsidiaries; all regulatory or statutory actions involving them; and direct and indirect tax disputes, with the number of cases and total amounts involved. SEBI’s October 2020 board paper also records that the risk-factor section should contain a summary of outstanding litigation disclosed elsewhere in the document. The summary should be presented in a table, with the amounts involved where they can be quantified. Criminal and regulatory matters that could have a material adverse effect should be highlighted separately.

5. Anchor investor section: who came in, and for how long

Under Regulation 2(1)(c) of the ICDR Regulations, an anchor investor is a qualified institutional buyer that applies for at least ₹10 crore in a main-board public issue conducted through the book-building process. For an issue under Chapter IX of the regulations, the minimum application value is ₹2 crore.

Anchor-investor shares were originally locked in for 30 days from allotment under Regulation 288(4). The ICDR Amendment Regulations extended the lock-in to 90 days for 50% of the shares allocated to anchor investors. The change applies to IPOs opening on or after 1 April 2022. The amendment followed the view that a longer lock-in for part of the anchor allocation could improve investor confidence while still leaving anchor investors with some flexibility.

6. OFS versus fresh issue: where the cheque lands

A fresh issue and an offer for sale, or OFS, send the IPO money to different places.

In a fresh issue, the company creates new shares, the money goes to the company, and the company’s share capital increases. The money can be raised for stated Objects of the Issue such as expansion, debt repayment or working capital. In an OFS, existing shares held by promoters or investors are sold, the money goes to the selling shareholders, and the company itself receives no money. An IPO can consist entirely of a fresh issue, entirely of an OFS, or a combination of both.

For issuers making an IPO under Regulation 6(2), which applies to companies that do not meet the asset, net-worth or profitability criteria and therefore have to allot at least 75% of the issue to qualified institutional buyers, the 2022 amendment added further limits. Selling shareholders who individually, or together with persons acting in concert, own more than 20% of the pre-IPO shareholding cannot offer more than 50% of their pre-IPO holding. Selling shareholders holding less than 20% cannot offer more than 10% of their pre-IPO holding. Shareholders holding more than 20% are also subject to a one-year lock-in from the date of IPO allotment.

Summary: governing provision for each section

All statements in this feature are attributed to named public sources. Nothing in this section is investment advice or a view on any specific issuer, issue or security.

Closing note

Market data: Zerodha AfterMarket Report, 1 September 2026 close. Editorial: Mint Mumbai print edition, 2 September 2026. Feature: independently sourced from named public publications. Strictly fact-based. No investment advice.