RBI Grade B Current Affairs — 1 October 2026

Around ten to twelve companies filed draft red herring prospectuses with SEBI on September 29 and 30, signalling sustained primary market momentum heading into the fourth quarter. The filings span sectors including manufacturing, services, and technology. Companies file DRHPs to seek SEBI approval before launching public share sales. SEBI typically has thirty working days to issue observations on a DRHP, after which the company has twelve months to proceed with the offering.

An Initial Public Offering is the process by which a private company raises capital from the public by issuing shares listed on a recognized stock exchange. In India, the process is governed by SEBI's Issue of Capital and Disclosure Requirements (ICDR) Regulations, 2018.

The journey begins when a company files a Draft Red Herring Prospectus (DRHP) with SEBI. The DRHP contains detailed disclosures about the company's financials, risk factors, objects of the issue (how proceeds will be used), and the promoter background. SEBI scrutinizes the document and issues its 'observations' — essentially a clearance letter — within 30 working days for book-built issues.

Once SEBI observations are received, the company has a 12-month validity window to open the IPO. The final offer price and issue size are disclosed in the Red Herring Prospectus (RHP) filed just before the issue opens.

IPOs can involve a fresh issue of shares (company gets the money) or an offer for sale (existing shareholders sell their stake; company gets nothing). Many Indian IPOs combine both. SEBI mandates minimum public shareholding of 25% post-listing for most companies.

The primary market — where securities are first sold to investors — is distinct from the secondary market where listed shares are subsequently traded. Sustained DRHP filing activity is a leading indicator of primary market health and investor confidence in equity valuations.

SEBI Chairman Tuhin Kanta Pandey announced that SEBI and RBI are jointly working to simplify onboarding processes for foreign portfolio investors and to facilitate India's inclusion in global bond indices. The move aims to reduce compliance friction for FPIs entering Indian debt markets. Streamlined KYC, faster registration, and coordinated regulatory frameworks between the two regulators are central to the effort, signalling a push to deepen foreign participation in India's fixed-income market.

Foreign Portfolio Investors (FPIs) are registered entities — including foreign institutions, hedge funds, and sovereign wealth funds — that invest in Indian securities markets. SEBI regulates FPI registration and market access, while RBI governs the debt market limits and foreign exchange flows under FEMA. Historically, the dual regulatory structure created friction: FPIs had to separately comply with SEBI's KYC requirements and RBI's Fully Accessible Route (FAR) or Voluntary Retention Route (VRR) limits before deploying capital in Indian bonds.

India's inclusion in global bond indices — JP Morgan's GBI-EM index (from June 2024) and Bloomberg's EM Local Currency Index — has significantly raised the stakes. Index inclusion drives passive capital inflows as global funds automatically rebalance portfolios to match the index. But for this capital to flow smoothly, FPI onboarding must be fast, KYC must be harmonised, and documentation requirements must not deter new entrants.

SEBI and RBI are now working to unify and simplify FPI registration, addressing issues like re-KYC timelines, beneficial ownership disclosures, and category-wise investment limits. This inter-regulatory coordination is exam-relevant because it sits at the intersection of SEBI's mandate (market intermediary regulation) and RBI's mandate (forex flows, debt market stability) — precisely the kind of regulatory boundary question that both SEBI Grade A and RBI Grade B examiners probe.