Time Is The Coin For Investors

Sebi reduction of time for IPO listing to boost investors’ fortunes.

- Yagnesh Kansara

Finally, there’s some good news for those choosing to invest in Initial Public Offerings (IPOs) of new companies. The listing period of shares offered in IPOs have now been reduced to three days from the closure of the issue (Transction Day or T Day) from the previous six days. The first company to get listed within three days of the closure of its IPO was Affle India on August 8, 2019. A lot of efforts were made by Securities and Exchange Board of India (Sebi) to shrink the listing time period.

The decision to reduce the IPO listing time period was taken almost a year ago, when Sebi Board met on September 18, 2018. Sebi had approved in principle, the proposal of revisiting the public issue process by way of introducing the use of Unified Payment Interface with facility of blocking the funds. Application Supported by Blocked Amount (ASBA) facility, as a new payment mechanism for retail investor applications was submitted through intermediaries.

This is a significant reform, Sebi had said, which aimed at reducing the time period for listing of issues from T+6 days to T+3 days. The compression in post-issue timelines and the consequent early listing and trading of shares will benefit both issuers as well as investors. The former will have faster access to the capital raised, thereby enhancing ease of doing business and the latter will have early liquidity, Sebi stated.

Under the new reform, there will be no physical movement of retail investor application forms from intermediaries to Self-Certified Syndicate Banks.

The modalities for implementation will be worked out in consultation with the stakeholders. Sebi had said, the process will be implemented in a phased manner.