Sebi halves time period to list shares after IPO closure: All you need to know

Shares can now be listed on the third (T+3) day from the date of closure (T) of an IPO, instead of the existing six (T+6) days.

The Securities and Exchange Board of India (Sebi) on Wednesday reduced the timeline for listing of shares on the stock exchanges after the closure of Initial Public Offerings (IPOs), bringing it down to three days from the existing six days.

Sebi (File Photo/Reuters)

“It has been decided to reduce the time taken for listing of specified securities after the closure of public issue to three working days (T+3) as against the present requirement of six working days (T+6). ‘T’ being the issue closing date,” Sebi noted in a circular.

The move to halve the time period for listing of shares comes after the Sebi board, at its meeting in June, approved a proposal in this regard.

Here is all you need to know about the new rule:

(1.) For IPOs opening on or after September 1, the new timeline will be ‘voluntary,’ the market regulator said, adding, however, that it will be ‘mandatory’ for issues coming after December 1.

(2.) According to Sebi, this reduction will benefit both the issuers and investors. While issuers will have faster access to the capital raised, investors will get the opportunity to have early credit and liquidity for their investment.

(3.) The compensation to an investor in case of delay in the unblocking of ASBA (Application Supported by Blocked Amount) money shall be computed from the T+3 day.

(4.) The third-party verification of such applications will be carried out by the Registrar to an Issue, who will match the PAN details of an applicant's demat account with those in the bank account.

(5.) In case of a mismatch, the concerned ASBA will continue to be considered ‘invalid’ for finalising the basis of allotment.

(With agency inputs)