India’s SEBI mandates three-day IPO listing timeline to boost efficiency

The Securities and Exchange Board of India (SEBI) has implemented a mandatory three-day timeline for post-IPO listings starting today, marking a significant shift in the country’s IPO processing. This move follows a series of progressive steps aimed at enhancing the efficiency of India’s capital markets and is expected to benefit both issuers and investors alike.

In June, SEBI approved a faster timeline for IPO processing, which was initially an elective option for companies. By August, details of the accelerated IPO schedule were circulated, allowing companies to opt for a shorter listing period. This optional early adoption period started on September 1, 2023.

The new mandatory timeline includes critical changes such as next-day allotment after the IPO closes, crediting shares to demat accounts on the second day post-closing, and finalizing stock exchange listings by the third day post-closing. These changes are designed to improve business efficiency and speed up access to capital for issuers. Moreover, they address investor concerns regarding the blockage of funds by initiating compensation starting from the third day post-closing if any delays occur.

This streamlined process is complemented by India’s transition to a state-of-the-art same-day (T+1) share settlement system, which commenced on January 27. This system has significantly enhanced market liquidity and investor flexibility, setting a new standard in trading efficiency.

Adding to the momentum, SEBI’s Chairperson Madhabi Puri Buch has hinted at imminent plans for real-time transaction settlements in equity markets, indicating a future where trading operations could become even more instantaneous.

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