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New SEBI-Changes in IPO Listing Process

The deadline for listing initial public offerings (IPOs) has been shortened from the current T+6 days to T+3 days, according to a statement released by market regulator SEBon Wednesday. The new regulations take effect in December 2023 and require initial public offerings (IPOs) to list within three days of the issue closing date.

The time taken for the listing of specified securities after the closure of the public issue will now only be three working days (T+three days), as opposed to the current requirement of six working days (T+six days), with “T” being the issue closing date. This decision was made after thorough consultation with market participants and after taking into account public comments submitted in response to the consultation paper on the aforementioned subject matter, according to Sebi.

It stated that the T+3 timeline for listing must be suitably disclosed in the public issues’ offer documents.

For public issues opening on or after September 1, 2023, the new regulations will be applicable voluntarily. On or after December 1, 2023, they will become mandatory.

Read also: SEBI Bans “Baap of Chart” from Securities Market, Orders ₹17.20 Crore Refund

The regulator states that stakeholders should benefit from the shortened listing timeline since issuers will receive their funds and allottees will receive their securities sooner.

Additionally, the action guarantees that subscribers who were not assigned shares will promptly get their money returned. A shorter period of time will see the deployment of resources from all parties involved in the public issue process, including stock exchanges, banks, depositories, and brokers.

Companies will need to finalize allocation by 6 p.m. on T+1 day in accordance with the new guidelines. On T+2 day, the money will be transferred to the applicants who were not selected.

What do specialists say about IPO listing new changes?

The regulatory change to a T+3 debut, according to analysts, represents a step in the right direction toward more effective market procedures.

We believe that by allowing all parties involved in the IPO process to make the best use of their available resource pool, the decision is intended to be advantageous to all of them. Manish Chowdhury, Head of Research at StoxBox, said, “It is encouraging to see that the regulator is taking decisive action to ensure a smoother ecosystem for the overall IPO process.”

Read also: SME IPOs – Everything you need to know

“By reducing the settlement period, investors will have faster access to funds and increased market liquidity, which will promote a more flexible trading environment. Amit Goel, Co-Founder & Chief Global Strategist at Pace 360, stated that greater participation and interest from investors could result from the listing process’ improved efficiency, potentially increasing trading volumes.

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