The Securities and Exchange Board of India (Sebi) board has approved a proposal to reduce the listing time for Initial Public Offerings (IPOs) from 6 days to 3 days. The decision, made during the board meeting, aims to streamline and expedite the process of listing shares and will be implemented in two phases.
According to the approved plan, the revised timeline of T+3 days (three days from the date of issue closure) will be voluntary for all public issues opening on or after September 1, 2023, and mandatory for issues opening on or after December 1, 2023. This move aligns with the recommendations put forth by Sebi in its May discussion paper, reflecting the regulator’s ongoing efforts to simplify the IPO ecosystem and enhance efficiency.
The reduction in the listing time is expected to bring benefits to both issuers and investors. By shortening the time period, issuers will receive their funds faster, while allottees will receive their securities in a shorter timeframe. Additionally, subscribers who were not allotted shares will receive their refunds promptly.
Sebi assured that extensive consultation with stakeholders, including anchor investors, registrar and transfer agents, broker-distributors, and banks, had taken place before finalizing the decision. The regulator conducted extensive stress testing to ensure a smooth transition to the new listing timeframe of T+3.
The shortened listing timeline also brings efficiency gains for various stakeholders involved in the IPO process, as it allows for the deployment of resources by stock exchanges, banks, depositories, and brokers for a shorter duration.
During the board meeting, Sebi also approved other significant decisions. Provisions related to the listing of non-convertible debt securities (NCDs) and voluntary delisting of NCDs were introduced. Additionally, direct participation by clients in the limited-purpose clearing corporation (LPCC) was enabled, opening new avenues for investor involvement.
In a move benefiting Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs), Sebi cleared proposals to introduce a provision granting board nomination rights to unitholders of InvITs and REITs. This measure aims to enhance the governance framework and increase investor participation in these investment vehicles.
The decisions taken in the Sebi board meeting signify the regulator’s commitment to streamlining processes, enhancing efficiency, and safeguarding the interests of market participants. The revised listing time for IPOs is expected to usher in a new era of speed and convenience in the Indian capital markets, further bolstering investor confidence.
Sources By Agencies