SEBI Proposes To Cut Down IPO Listing Timeline To Three Days From Six Days

The proposed reduction in timelines for listing and trading of shares will benefit both issuers as well as investors.

<div class="paragraphs"><p>(Source:&nbsp;graystudiopro1 on Freepik)</p></div>
(Source: graystudiopro1 on Freepik)

Capital markets regulator SEBI on Tuesday proposed reducing the time taken for the listing of shares on stock exchanges after the closure of initial public offerings to three days from six days at present. 

The proposed reduction in timelines for listing and trading of shares will benefit both issuers and investors. 

"Issuers will have faster access to the capital raised, thereby enhancing the ease of doing business, and investors will have the opportunity to have early credit and liquidity from their investment," SEBI said in its consultation paper. 

In November 2018, the markets regulator introduced the Unified Payment Interface as an additional payment mechanism with Application Supported by Blocked Amount for retail investors and prescribed the timelines for listing within six days of the closure of the issue (T+6). 'T' is the day of closure of the issue. 

Over the last few years, SEBI has ensured that a series of systemic enhancements have been undertaken across all the key stakeholders of the IPO ecosystem to streamline the activities involved in the processing of public issues, which will pave the way to reduce the listing timelines from T+6 to T+3. 

In its consultation paper, SEBI has suggested reducing the time period from the date of issue closure to the date of listing of shares through public issues from the existing six days to three days (T+3). 

The Securities and Exchange Board of India (Sebi) has sought comments from the public till June 3 on the proposal. 

This comes after SEBI has done extensive back-testing and simulations with all stakeholders, including stock exchanges, sponsor banks, the NPCI, depositories, and registrars, in respect of various key activities involved in the public issue process.

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