In a significant shift, Indian companies are increasingly choosing to list their shares within three days of closing their initial public offerings (IPOs), aligning with the Securities and Exchange Board of India's (SEBI) recent circular. The directive, which halves the timeline from T+6 to T+3 days, is part of SEBI's ongoing efforts to streamline the IPO process.
The regulatory change will be implemented in two phases. Between September 1 and November 30, adherence to the new timeline is voluntary. However, it will become mandatory from December 1.
Ratnaveer Precision Engineering Ltd. was among the first to align with the updated regulations, listing on a T+3 basis on Tuesday after closing its issue on September 11. RR Kabel Limited is set to make its stock market debut on September 20, becoming the first company to list under the T+2 timeline, just two working days after its IPO closed on September 15.
Despite the voluntary nature of the new timeline until December, most companies that have listed since September 1 continue to follow the traditional T+6 schedule. The period between September and December is seen as a transitional stage, with bankers and registrars striving to ensure a smooth transition.
JSW Infrastructure Ltd., part of the JSW Group, may also opt for the T+3 listing route, according to an anonymous banking source. The company's IPO will open on September 25 and close on September 27, with shares priced in the Rs 113-119 ($1 = Rs 83.05) range.
The proposal to reduce the listing timeline was approved during SEBI's June board meeting. Experts believe this change will benefit both issuers and investors by accelerating fund receipt for issuers and reducing share allotment times for investors.
All stakeholders involved in IPOs have tested the T+3 system. According to SEBI, the revised timeline will ensure that resources from stock exchanges, banks, depositories, and brokers are deployed for a shorter period during the public issue process.
In a notable case, RR Kabel's IPO, which raised Rs 1,964.01 crore ($265 million), was open for public subscription from September 13 to September 15. The IPO was oversubscribed 18.69 times with a lot size of 14 shares. The company intends to use the fresh issue proceeds primarily for debt repayment and general corporate purposes. Early indications from the grey market suggest that RR Kabel shares may be listed at a premium.
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