An underwriter, registered with SEBI under the Securities and Exchange Board of India (Underwriters) Regulations, 1993, commits to subscribing to unsold securities in a public issue, guaranteeing the issuer a minimum amount. SEBI maintains a list of registered underwriters on its website. The net worth requirement and registration framework place underwriters among SEBI's regulated intermediaries, alongside merchant bankers and brokers, making them a distinct and testable category in capital market regulation.

Underwriting is the guarantee mechanism that makes public issues viable. When a company launches an IPO or rights issue, there is always a risk that the public will not subscribe fully. An underwriter steps in contractually, promising to buy any portion of the issue that remains unsubscribed. This de-risks the issuer and supports price discovery.

SEBI regulates underwriters through the SEBI (Underwriters) Regulations, 1993. Key features of the framework include: (1) Mandatory registration with SEBI before conducting underwriting business; (2) A minimum net worth requirement — underwriters must maintain a net worth of at least ₹20 lakh; (3) The underwriting obligation cannot exceed 20 times the underwriter's net worth at any point; (4) Registration is granted for a specific period and must be renewed; (5) SEBI can inspect, investigate, and take disciplinary action against registered underwriters.

Underwriters are distinct from lead managers (merchant bankers) who manage the issue process. An underwriter's primary obligation is financial — absorbing unsold stock. In practice, most lead managers are also registered as underwriters, but the registrations are separate.

For SEBI Grade A, the examiner tests the specific thresholds (₹20 lakh net worth, 20× obligation cap), the governing regulation year (1993), and the distinction between underwriters and other intermediaries. The SEBI website's registered-intermediary list is a frequently referenced source for such questions.