SEBI Reduces IPO listing Timeline To Three Days From Existing Six Days

SEBI said the reduced IPO timeline will help issuers receive their securities in a shorter period, and investors who have not been allotted securities will also receive their money back faster. 

The move will ensure that the resources of stakeholders, such as banks, stock exchanges, and brokers, are deployed for a shorter duration, according to SEBI's statement.

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The Securities and Exchange Board of India (SEBI), the market regulator on Wednesday announced the reduction of the listing timeline following an initial public offering (IPO). The new timeline will be shortened to three days after the closure of the issue, compared to the existing T+6 timeline, reported MoneyControl. 'T' represents the day when the subscription for the IPO closes. 

"The revised timeline of T+3 days shall be made applicable in two phases i.e. voluntary for all public issues opening on or after September 01, 2023 and mandatory on or after December 01, 2023," SEBI said after its board meeting in Mumbai.

According to the market regulator, the reduction in the listing timeline will bring several benefits. Issuers will receive their securities in a shorter period, and investors who have not been allotted securities will also receive their money back faster. 

Under the current six-day process, the basis of allotment is finalised by the registrar on T+3. With the new timeline, this will be revised to T+1, and the finalisation will be completed on or before 6 pm.

The decision comes after extensive back-testing and simulations by all stakeholders, including stock exchanges, sponsor banks, NPCI, depositories, and registrars, with respect to various activities involved in the public issue process, SEBI said. 

Furthermore, this move will ensure that the resources of stakeholders, such as banks, stock exchanges, and brokers, are deployed for a shorter duration, according to SEBI's statement.

As per the report, SEBI, in 2018, introduced Unified Payment Interface (UPI) as an additional payment mechanism along with Application Supported by Blocked Amount (ASBA) for retail investors. As part of this introduction, SEBI also prescribed a listing timeline of six days from the closure of the offer.

Before the implementation of these changes, the listing timeline used to extend up to 22 days. However, SEBI took measures to shorten it to 12 days, providing a more efficient and streamlined process for listing, the report said.