The Securities and Exchange Board of India (SEBI) has clarified that mutual-fund schemes are not permitted to invest in pre-IPO share placements, and may only participate in the anchor investor portion or the public issue of an IPO. The move is intended to prevent funds from ending up with unlisted shares if an IPO is delayed or cancelled. The directive affects India’s mutual-fund industry managing over ₹75 trillion and comes amid a strong IPO pipeline in 2025.