Razorpay has moved closer to its much anticipated stock market debut after receiving observations from the Securities and Exchange Board of India on its proposed IPO papers.

However, the company’s preparations for a public listing are unfolding alongside a legal development involving its co founders, who must now face an ongoing prosecution case filed by the Serious Fraud Investigation Office.

SEBI issued its observations on Razorpay Software Limited’s draft offer documents on November 3, 2026. The regulatory development was reflected in the regulator’s processing status update published on November 13, allowing the company to proceed with the next stages of its IPO preparation.

Razorpay had submitted its draft documents through the confidential pre filing route in June 2026. This route allows companies to obtain regulatory feedback while keeping sensitive financial and business information confidential during the initial review process.

The company has not yet announced its final IPO size, price band or subscription dates. Media reports estimate that the proposed issue could raise between ₹5,000 crore and ₹6,000 crore, although these figures have not been confirmed through a final public issue announcement.

Reports suggest that Razorpay could target a valuation of approximately $5 billion, lower than the $7.5 billion valuation associated with its 2021 funding round. The final valuation will depend on the company’s financial performance, market conditions and investor demand.

The proposed listing is being targeted for the January to March 2027 period, according to media reports. However, this is an expected timeline rather than a confirmed listing date.

The proposed IPO is expected to include both a fresh issue and an offer for sale. The final division between the two components has not been publicly disclosed, so the amount of capital that would flow directly into the company remains unknown.

Razorpay was founded in 2014 by Harshil Mathur and Shashank Kumar. What began as a digital payments business has expanded into payment processing, business banking, payouts, payroll, lending and cross border payment services.

Its platform serves businesses ranging from startups and small enterprises to larger corporate customers. This wider product offering gives Razorpay exposure to several financial technology segments rather than relying entirely on payment processing.

The IPO opportunity, however, comes with a legal development that investors should understand. On November 4, 2026, the Karnataka High Court rejected a petition filed by co founders Harshil Mathur and Shashank Kumar seeking to quash an SFIO prosecution complaint.

The complaint is linked to an investigation into an alleged network of Chinese controlled digital lending entities. The investigation examined the activities of several companies, including Mad Elephant Network Technology Private Limited, which was allegedly involved in predatory digital lending and coercive recovery practices.

The prosecution alleges that approximately ₹320 crore of transactions connected with MENTPL passed through Razorpay’s payment aggregation platform. This figure refers to the alleged transaction flow and should not be confused with an amount proven to have been misappropriated by Razorpay.

The SFIO complaint raises questions about merchant onboarding, customer verification, due diligence and transaction monitoring. It alleges that the two directors failed to exercise adequate care and diligence in relation to the merchant’s activities on the payment platform.

The underlying investigation also refers to alleged wrongful gains of approximately ₹56.63 crore generated by MENTPL through its lending operations. These allegations relate to the lending network and are not a finding that Razorpay earned or retained this amount.

The Karnataka High Court declined to quash the complaint at this stage. The court observed that the allegations involved disputed questions of fact that required examination during trial rather than being decided through a preliminary challenge to the proceedings.

The directors had challenged the prosecution on several grounds, including the extent of their responsibilities, the applicability of the legal provisions and the basis for continuing the complaint. The court did not accept their request to terminate the proceedings at the current stage.

Importantly, the High Court’s decision is not a finding of guilt. The prosecution will continue before the trial court, where the allegations and the responses of the accused will be examined through the legal process.

Razorpay has maintained that the company and its directors have no association with the entities involved in the alleged illegal lending operations. The company has also stated that it has faith in the judicial process and will pursue appropriate legal remedies.

Another important distinction is that Razorpay itself has not been named as an accused in the current prosecution complaint, although the court observed that its role could emerge as the proceedings progress. The complaint currently names the two directors.

For prospective investors, the timing of the legal development is significant because Razorpay is preparing for a public listing. Investors will want to understand the nature of the allegations, the company’s compliance framework and whether the proceedings could have any financial, operational or reputational implications.

The confidential filing route also means that the full financial picture is not yet available publicly through a conventional DRHP. Revenue growth, profitability, payment volumes, customer concentration, regulatory compliance and the final IPO valuation will be important areas to examine when more information becomes available.

Razorpay’s proposed IPO therefore brings together two developments that deserve separate attention. SEBI’s observations move the listing process forward, while the SFIO proceedings against the directors remain unresolved. The final offer documents, financial disclosures and subsequent legal developments will provide investors with a clearer basis for assessing the company before its market debut.