SEBI reduces timeline for listing by 10 days

In an effort to make public issue of shares more transparent and faster, the Securities and Exchange Board of India (SEBI) has almost halved the time allowed between closure of an issue and its subsequent listing. From 3 May, companies will have just 12 days from when an IPO closes to have their shares listed on a stock exchange.

The rationale behind this change seems to be to reduce inordinate delays while recording and reconciling data at multiple levels. Before 1 May investors had to wait 22 days after an IPO closed before it was listed and trading could begin. Reducing this time will lower exposure to market risks for investors – a move that has been welcomed by the large investor community.

The reduced timeline is applicable also to applications supported by blocked amounts (ASBA), whereby funds are only debited from the investor’s bank account on allotment of shares. All investors can now make ASBA applications and SEBI, in its 22 April circular, has provided an indicative timeline for handling of both ASBA and non-ASBA applications.

The legislative and regulatory update is compiled by Nishith Desai Associates, a Mumbai-based law firm. The authors can be contacted at nishith@nishithdesai.com. Readers should not act on the basis of this information without seeking professional legal advice.