India’s stock market regulator Securities and Exchange Board of India (SEBI) on June 28 said it will reduce the listing timeline after an initial public offering (IPO) to three days after the closure. The present timeline after closure follows T+6 where T indicates the day issue closes for the subscription.
SEBI in its notification said, “The revised timeline of T+3 shall come into effect 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.”
Explaining the decision the market regulator said, that it will ensure that issuers have faster access to the capital raised, thereby enhancing the ease of doing business, and the investors have an opportunity for early credit and liquidity of their investment. The decision was taken after a series of extensive back-testing and talks with all the stakeholders including stock exchanges, sponsor banks, NPCI, depositories and registrars.
In the existing process of timeline, the registrar has to finalise the basis of allotment and submit it to the designated stock exchange for approval on T+3, whereas in the new timeline, the same procedure will be followed on or before 6 PM on T+1. Earlier issuers made listing application to stock exchanges for trading activities on T+5 but now according to new timeline it will be done on or before 6:30 PM on T+2.
SEBI introduced Unified Payment Interface (UPI) as an additional method of payment with application supported by blocked amount (ASBA) for retail investors and the prescribed time of listing of within six days of closure of the offer. Prior to this, the listing timeline was as far as 22 days which was cut down to 12 days.
