The Securities and Exchange Board of India (SEBI) has introduced new rules for Initial Public Offerings (IPOs), significantly reducing the waiting time for investors. Effective December 1, 2023, SEBI has mandated a shorter listing timeline of three days (T+3) instead of the previous six days (T+6) after the IPO closure. This move aims to expedite the process, ensuring that shares are credited to investors' Demat accounts swiftly.
Previously, investors had to endure a longer waiting period for the listing of IPO shares and the allocation process. With the new regulations, companies conducting IPOs will now be listed on the stock exchange within three days of the subscription closure. This development is expected to bring relief to investors, who will not have to wait for an extended period to receive their allotted shares or refunds in case of non-allotment.
SEBI's decision to reduce the IPO listing timeline to T+3 has been implemented to streamline and expedite the entire process. Prior to this change, investors had to wait for six days for the listing of shares, followed by an additional period for share allocation or refund processing. The new regulations aim to enhance efficiency and provide a more seamless experience for IPO investors.
This modification in the IPO listing timeline is a two-step process. Starting from September 1, 2023, the T+3 rule was optional for all IPOs. However, from December 1, 2023, onwards, it became mandatory for all IPOs to adhere to the T+3 listing timeline. This decision was made after consultations with stakeholders, including anchor investors, registrars, transfer agents, brokers, and banks. SEBI confirmed the effectiveness of the rule after thorough testing and consultation with various entities involved in the IPO process.
SEBI's statement emphasizes that this step was taken after careful consideration and consultation with market participants. The regulatory body believes that this move will ensure the deployment of resources from banks, stock exchanges, brokers, and other stakeholders for a shorter duration, leading to a more efficient IPO process.
In conclusion, SEBI's decision to implement a T+3 listing timeline for IPOs effective December 1, 2023, is expected to significantly benefit investors by reducing the waiting time for share crediting and providing a faster resolution for refunds in case of non-allotment. This regulatory change aligns with SEBI's efforts to enhance the efficiency and transparency of the Indian stock market.