IPO Rules Changed, Listing Time Cut to Three Days: SEBI

Markets regulator the Securities and Exchange Board of India (SEBI) has reduced the Initial Public Offering (IPO) listing timeline by half from the present six (T+6 )days to three (T+3) days.

The new rules will be effective from December 2023 onwards, as per which IPOs would need to list after three days of the issue closing date.

In June 2023, SEBI in its board meeting had given the go-ahead to the proposal for reducing the timeframe for a listing of shares in a public Issue from the present six to three days, from the date of issue closure, referred to as T-Day.

The markets regulator has stated that the revised timeline of T+3 days will be introduced in two phases.

The offer documents for public issues are mandated to disclose the T+3 schedule for listing in a proper way, as per the SEBI notification.

The new guidelines will be voluntary in the case of public issues opening on or after September 1, 2023. However, these will be suitably needed for issues starting on or after December 1, 2023.

As per SEBI, the move will prove to be beneficial for stakeholders who would gain from the reduced listing schedule considering that issuers as well as allottees will receive their funds and securities earlier.

In addition, subscribers who were not given shares, are guaranteed to receive their refunds immediately because of this new initiative.

Also, it would help in reducing the burden on resources of all stakeholders, this includes those of stock exchanges, banks, depositories, and brokers, which will be utilised for a shorter period throughout the public offering process.

As per the new guidelines, companies are mandated to complete allocations by 6 pm on T+1 day. Then on the T+2 day, funds will be suitably returned to applicants who were unsuccessful to get shares.