With the introduction of new regulations by the Securities and Exchange Board of India (SEBI), investors would no longer have to wait as long for initial public offerings (IPOs). SEBI has mandated a three-day (T+3) listing timeline following the IPO close, as of December 1, 2023, as opposed to the previous six-day (T+6) timeline. This action is intended to speed up the procedure and guarantee that investors' Demat accounts receive shares as soon as possible.
Investors used to have to wait longer for the allocation procedure and the listing of IPO shares. Companies undertaking initial public offerings (IPOs) will now be required by the new regulations to list on the stock exchange three days following the subscription closing. Investors should experience relief from this move as they won't have to wait a long time to obtain their allotted shares or refunds in the event that they aren't allocated.
In an effort to accelerate and streamline the entire process, SEBI decided to shorten the IPO listing schedule to T+3. Before this modification, investors had to wait six days for the shares to be listed and then another six days for the shares to be allocated or refunds to be processed. The new rules are designed to improve productivity and give IPO investors a smoother experience.
There are two steps involved in this adjustment to the IPO listing timetable. All IPOs were not required to follow the T+3 regulation as of September 1, 2023. But starting on December 1, 2023, all initial public offerings (IPOs) had to follow the T+3 listing schedule. Following discussions with several parties, including banks, brokers, registrars, anchor investors, and transfer agents, this conclusion was made. Following extensive testing and consultation with several IPO process participants, SEBI verified the rule's efficacy.
The emphasis in SEBI's announcement is on the fact that market players were consulted and this decision was made after considerable thought. The regulatory body thinks that by taking this action, resources from banks, stock exchanges, brokers, and other stakeholders will be deployed for a shorter period of time, resulting in an IPO process that is more effective.
In conclusion, it is anticipated that investors will gain a great deal from SEBI's decision to impose a T+3 listing timetable for initial public offerings (IPOs) starting on December 1, 2023. This will shorten the period investors must wait for share crediting and expedite the processing of refunds in the event of non-allotment. This regulatory modification supports SEBI's initiatives to improve the Indian stock market's effectiveness and openness.
