Rethink IPO norms urged

Kiran Mazumdar-Shaw said on April 7 that India’s stock-market rulebook still treats a biotech startup like a software company with sales, even though many drug companies spend 10 years or more in research and clinical trials before their first rupee of revenue. Her complaint was specific: she said India’s securities regulator, the Securities and Exchange Board of India, requires a three-year revenue track record for a regular listing, which blocks pre-revenue and even pre-clinical biotech companies from tapping public markets early. That is a big mismatch in biotech, because the expensive part comes first. A drug startup can burn cash for years on lab work, safety studies, and human trials before it has a product to sell. India does have a special market called the Innovators Growth Platform, created for companies using technology, intellectual property, data analytics, biotechnology, or nanotechnology. The platform was launched after a 2019 amendment, but Securities and Exchange Board of India documents say interest stayed “tepid” and the framework had to be reviewed again. Mazumdar-Shaw’s point was that if the exit door is narrow, the whole funding chain tightens. She said weak venture funding, regulatory bottlenecks, and the lack of viable exits are pushing high-value biotech innovation out of India. She used Bicara Therapeutics as the example. She said the oncology company was incubated within Biocon, did its research and development in India, but was structured in the United States because the United States market lets clinical-stage biotech companies raise capital earlier. (bicara.com/) That example is not abstract. Bicara filed to go public with the United States Securities and Exchange Commission in August 2024, showing how a company with no approved product can still reach public investors if the market accepts clinical-stage risk. This is why listing rules shape company design. If public markets only open after revenue appears, founders in regulated sectors are pushed toward contract research, licensing deals, or overseas holding companies long before they decide what product they actually want to build. India’s regulator has already been loosening some startup rules, including changes approved in June 2025 to make public-market access and founder ownership rules less rigid. But Mazumdar-Shaw’s argument is that biotech needs a deeper rewrite, because a company waiting for revenue in this sector may be waiting until the science is already leaving the country.