Expiring Sebi approvals put ₹18,000-cr IPOs at risk

A cooling initial public offering (IPO) market is beginning to weigh on India's capital formation pipeline, with about ₹18,000 crore in planned fundraising at risk.

- Agnidev Bhattacharya

Thirteen mainboard companies are nearing their 12-month deadlines by June to launch their issues or lose regulatory approval.

The impending expiry of these clearances, given by the Securities and Exchange Board of India (Sebi) between April and June 2025, underscores how volatile market conditions are prompting firms to defer listings, raising the prospect of higher costs, delayed timelines and a near-term squeeze on fresh market liquidity.

Per PRIME Database, these include the Munjal family's ₹3,600-crore Hero Fincorp Ltd offer, Morgan Stanley-backed Continuum Green Energy Ltd's ₹3,650 crore plan, and Norwest Venture Partners-backed Veritas Finance Ltd's proposed IPO worth ₹2,800 crore.

Following Sebi approval, companies typically file a red herring prospectus with the Registrar of Companies within four to six weeks.

Sebi regulations mandate that companies must launch their IPOs within 12 months of receiving the final observation letter. Failure to execute the share sale within this timeframe requires companies to file a new draft red herring prospectus (DRHP), undergo the review process again, and submit updated financial records.