Market regulator SEBI has announced a positive development for investors, as it halves the time required for IPO listings.
In a statement released on Wednesday, June 28, SEBI declared that the listing deadline will be reduced from ‘T+6 days’ to ‘T+3 days’ after the IPO bidding period ends.
Here, ‘T’ represents the closing date of the IPO.
SEBI outlined a two-phase implementation plan for the new listing deadline.
Initially, it will be optional for all IPOs opening on or after September 1, 2022, to adhere to the revised timeframe.
However, starting from December 1, 2022, it will become mandatory for all IPOs.
The market regulator emphasized that this change will enable companies to access the capital raised through IPOs more swiftly.
It aims to promote a favorable business environment and provide investors with prompt credit and liquidity for their investments.
SEBI arrived at this decision after extensive consultations and rigorous testing with various stakeholders,
including stock exchanges, sponsor banks, NPCI, depositories, and registrars, among others.
Under the current rules, the registrar allocates shares three days after the bidding process concludes,
and subsequently submits the allotment details to the relevant stock exchanges for approval.
However, under SEBI’s new deadline, this task must be completed before 6 pm on the following day after the bidding concludes.
Similarly, companies currently file listing applications with the stock exchanges for share trading approval on the fifth day after the bidding period ends.
In contrast, the proposed rule requires them to submit these applications by 6:30 pm on the second day after the bidding concludes.
SEBI had previously introduced UPI as an additional payment method for retail investors, supporting blocked amounts, in 2018.
It had also implemented a listing deadline of six days following the close of bidding.
The earlier listing deadline was set at 22 days, which has since been reduced to 12 days.