SEBI Continues To Fast-Track Approval For IPOs, Average Time For Acceptance Reduces To 107 Days In FY24

Data from PRIME Database revealed that the board took 129 days on an average to give approval for maiden offers in the preceding 2022-23 fiscal year (FY23)

The data showed that in certain cases, the initial offers were approved in under two months. (Image Source: Groww)

Source : Groww

The Securities and Exchange Board of India (SEBI) has continued fast-tracking the approval process for the initial public offerings (IPOs), data from PRIME Database revealed.

The statistics found that the capital markets regulator on an average took 107 days to authorise the approval for IPOs filed in the 2023-24 fiscal year (FY24). Comparatively, the board took 129 days on an average to give approval for maiden offers in the preceding 2022-23 fiscal year (FY23), reported Financial Express citing the data.

The report cited investment bankers and explained that this swift approval was possible due to a rise in the workforce employed by the regulator, the use of artificial intelligence (AI) tools in the process, and self-certifications provided by merchant bankers.

The data showed that in certain cases, the initial offers were approved in under two months. In the recent years, certain public issues such as Aadhar Housing Finance, Brainbees Solutions, Bharti Hexacom, Ideaforge Technologies, Indian Renewable Energy Development Agency, and Cello World, received approval for their offerings in less than two months.

Ramnish Kochgave, President, Investment Banking, Elara Capital, commented, “This depends a lot on how much work has gone into filing the DRHP. Typically, before filing the DRHP, better-quality bankers and lawyers take a lot of care with regard to the rejection criteria that Sebi looks for. So, when the document comes to Sebi, its observations are softer,” the report stated.

Kochgave added that the document’s quality is a crucial factor in the process and it has majorly improved in the recent years.

Notably, the primary market has been very active in the last three or so years. The regulator shared its final observations with 72 DRHPs in FY24, while the same figure stood at 63 in the preceding fiscal year. This figure is further expected to increase in the current 2024-25 fiscal year (FY25).