Direct Public Offerings

A Direct Public Offering (DPO), also known as a Direct Listing, is a method by which a company offers its shares to the public without the involvement of underwriters or investment banks — bypassing the traditional book-building process used in a conventional IPO. In a DPO, the company sells shares directly to investors, typically at a fixed price, without paying underwriting commissions or creating lock-up periods for existing shareholders. This approach significantly reduces issuance costs and allows existing shareholders to sell their holdings from day one of listing. In the United States, prominent companies like Spotify and Coinbase have used direct listings on NYSE. In India, SEBI regulations currently require most public offerings to follow the book-built or fixed price IPO route with mandatory underwriting arrangements. However, SEBI has been exploring frameworks for simplified listing routes for certain categories of companies — particularly startups and SME companies — that may reduce dependence on traditional underwritten IPO structures in future.