SEBI cuts IPO listing time to 3 days for Faster Access to Capital
The Securities and Exchange Board of India (SEBI), the country’s market regulator, announced on June 28 its decision to reduce the listing time for IPOs to 3 days after the issue’s closure. This change aims to streamline the process, as currently, the timeline stands at T+6 (with ‘T’ being the day the subscription period ends).
SEBI stated, “The revised timeline of T+3 days will be implemented in two phases. It will be voluntary for all public issues opening on or after September 01, 2023, and mandatory for those opening on or after December 01, 2023.”
By implementing this shorter listing timeline, SEBI aims to provide issuers with quicker access to the capital raised. This move ultimately enhances the ease of doing business, while also allowing investors to benefit from early credit and increased liquidity for their investments, according to the market regulator.
The decision to reduce the listing timeline came after extensive back-testing and simulations conducted by all stakeholders involved in the public issue process, including stock exchanges, sponsor banks, the National Payments Corporation of India (NPCI), depositories, and registrars.
Under the existing timeline, the registrar finalizes the basis of allotment and submits it to the designated stock exchange for approval on T+3. However, in the new timeline, this step will be completed on or before 6 PM on T+1.
Additionally, previously, the issuer submitted a listing application to stock exchanges for trading permission on T+5. Now, this task will be accomplished on or before 6:30 PM on T+2.
SEBI had previously introduced the Unified Payment Interface (UPI) as an additional payment mechanism, alongside the Application Supported by Blocked Amount (ASBA) system for retail investors, in 2018. This change aimed to expedite the listing timeline to within six days of the offer’s closure.
Prior to this improvement, the listing timeline extended up to 22 days. However, it was subsequently reduced to 12 days, and now, SEBI’s latest decision brings it down further to just three days.
The Securities and Exchange Board of India (SEBI) serves as the regulatory authority for the securities and commodity markets in India. It operates under the ownership of the Ministry of Finance within the Government of India. Initially established on 12 April 1988 as an executive body, SEBI was granted statutory powers on 30 January 1992 through the SEBI Act, 1992.
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