India’s market regulator has prohibited mutual funds from investing in companies prior to their IPO placement, sources say. The move affects funds managing around ₹75.6 trillion and follows concerns that unlisted holdings expose retail investors to illiquid risk. It arrives as India’s IPO market races toward up to $8 billion in offerings this quarter, making the restriction timely. Analysts believe this may reduce pre-listing demand and shift pressure onto institutional and retail channels during subscription. Issuers may need to recalibrate anchor allocations accordingly.