The initial public offers (IPOs) process would take three days instead of the current six days, according to a proposal by SEBI, India’s financial markets regulator. Investors and issuers should benefit from the decision. The plan, which was the result of in-depth testing and simulations involving stakeholders including sponsor banks, depositories, and registrars, has been put out for public comment until 3 June by SEBI.
The authority on capital markets, SEBI, suggested on Tuesday to shorten the period of time required for the listing of shares on stock exchanges following the completion of initial public offers (IPOs) from six days to three. Both issuers and investors would benefit from the proposed shortened timescales for the listing and trading of shares.
According to SEBI’sconsultation document, “Issuers will have quicker access to the capital raised, improving the ease of doing business, and investors will have the opportunity to have early credit and liquidity of their investment.”
In November 2018, the markets authority established the Unified Payment Interface (UPI) as an additional payment method with Application Supported by Blocked Amount (ASBA) for retail investors and specified the deadlines for listing within six days after issue closing (T+6). The issue will be resolved on day “T” of the week.
Over the last several years, SEBI has made sure that a number of systemic improvements have been made across all of the major players in the IPO ecosystem. These improvements will make it possible to shorten the listing timeframes from T+6 to T+3 by streamlining the processes involved in processing public issues.
The time period from the date of issue closing to the date of listing of shares through public offerings would be reduced from the current six days (T+6) to three days (T+3), as indicated by SEBI in its consultation paper.
SEBI, the Securities and Exchange Board of India, has extended the deadline for public comments on the plan to June 3.
This comes after thorough back-testing and simulations by all stakeholders, including stock exchanges, sponsor banks, NPCI, depositories, and registrars, with regard to several essential actions involved in the process of a public offering, were performed by SEBI.