Shorter IPO timeline to become effective from December 1, says Sebi

The Securities and Exchange Board of India (Sebi) on Wednesday said that the shorter T+3 timeline for initial public offerings (IPOs) would become mandatory from December 1, 2023. Any IPOs getting launched from December will list in three working days after the closure of the issue.

At present, it takes six working days (T+6) for an IPO to list. Sebi has said the T+3 regime will be made voluntary from September 1. The regulator has said the T+3 timeline for listing will have to be appropriately disclosed in the offer documents of public issues. The shorter listing time period is expected to boost the primary market activity as it will help free up blocked capital earlier. It will also help investors and issuers mitigate the impact of market volatility.

The move to T+3 timeline for IPOs comes in less than a year of transition towards a T+1 trade settlement cycle for secondary market trades. Sebi has now started ground work for allowing instantaneous settlement of secondary market trades.