Sebi proposes cutting IPO listing time from 6 days to 3 days for enhanced efficiency

Sebi, the capital markets regulator, has recently put forth a proposal to shorten the listing timeline for shares on stock exchanges following the closure of initial public offerings (IPOs). The current listing period of six days would be reduced to just three days, a move that is expected to benefit both issuers and investors.

According to Sebi's consultation paper, this reduction in timelines will enable issuers to gain faster access to the capital raised, thereby enhancing the ease of doing business. Additionally, investors will have the opportunity to obtain early credit and liquidity for their investments.

In November 2018, Sebi introduced the Unified Payment Interface (UPI) as an additional payment mechanism, along with the Application Supported by Blocked Amount (ASBA) system, for retail investors. At that time, Sebi also prescribed the listing timeline of six days (referred to as T+6) following the closure of an IPO, with 'T' denoting the day of issue closure.

Over the past few years, Sebi has taken significant steps to streamline activities within the IPO ecosystem, implementing various systemic enhancements across all key stakeholders. These efforts have paved the way for a reduction in listing timelines from T+6 to T+3.

Sebi's consultation paper suggests a decrease in the time period between the date of issue closure and the date of share listing through public offerings. The proposed change would reduce the listing timeline to three days (T+3) instead of the current six days.

To gather feedback on this proposal, Sebi has invited comments from the public until June 3.

This move by Sebi follows extensive back-testing and simulations conducted by all stakeholders involved in the IPO process, including stock exchanges, sponsor banks, the National Payments Corporation of India (NPCI), depositories, and registrars. These tests aimed to evaluate the impact and feasibility of various key activities associated with public offerings.