Governing Authorities

Investing in Pre-IPO and unlisted shares involves a structured ecosystem governed by multiple authorities. Each plays a specific role in ensuring legality, transparency, and investor protection.

1. Ministry of Corporate Affairs (MCA)

Role: Handles the birth and legal registration of every company in India.

  • Incorporation under Companies Act, 2013.
  • Authorizes share capital, directors, and audits.
  • Maintains official records via the Registrar of Companies (ROC).

2. Securities and Exchange Board (SEBI)

Role: The apex regulatory authority for the entire securities market.

  • Governs IPOs, Pre-IPOs, Mutual Funds, Brokers, and Depositories.
  • Approves the Draft Red Herring Prospectus (DRHP) for IPOs.
  • Protects investor interests and ensures fair disclosure.

3. Stock Exchanges (NSE & BSE)

Role: National platforms where companies list their shares after SEBI approval.

  • Scrutinize companies before final listing.
  • Maintain SME and Main Boards for different-sized firms.
  • Provide continuous monitoring of corporate governance post-listing.

4. Depositories (NSDL & CDSL)

Role: Safekeeping and transfer of all shares in Demat (electronic) form.

  • Maintain investor Demat accounts via Depository Participants (DPs) like Zerodha, Groww, etc.
  • Handle off-market transfers used for Pre-IPO transactions.

5. SEBI Registered Intermediaries

Role: Entities authorized to execute transactions and provide advice in the market.

  • Stock Brokers, Investment Advisers (RIA), Portfolio Managers (PMS).
  • Merchant Bankers (who manage the IPO process).
  • Registrar & Transfer Agents (RTA) like Link Intime & KFintech.

6. Tax, AML & FEMA Authorities

Role: Ensure financial compliance, taxation, and anti-money-laundering.

  • Income Tax Dept / FIU-IND: Track transactions via PAN and ensure PMLA compliance.
  • RBI (Reserve Bank of India): Controls capital inflows/outflows under FEMA, crucial for NRI & Foreign Investments.

Summary Hierarchy

Stage Authority Core Responsibility
Company Registration MCA / ROC Legal Incorporation
Pre-IPO Compliance SEBI Approval, disclosure norms
Listing Platform NSE / BSE Trading & monitoring
Shareholding Records NSDL / CDSL Demat transfer & ownership
Intermediaries Merchant Bankers / Brokers / RIA Execution & advisory
Tax / AML Control Income Tax Dept / FIU-IND / RBI KYC + PMLA compliance
In Short:
MCA gives a company life. SEBI gives it permission to raise public money. NSE / BSE give it a platform to trade. NSDL / CDSL give investors safe digital ownership.
And Herboza Capital connects people ethically to that ecosystem.