Sebi extends easier IPO rules till March 2027, bankers lobby says

The Securities and Exchange Board of India (SEBI) on Tuesday extended a temporary relaxation that allows companies planning to launch initial public offerings (IPOs) to revise the size of their fresh issues without filing fresh draft documents, providing greater flexibility to issuers navigating volatile market conditions.

According to a communication sent to the Association of Investment Bankers of India ( AIBI ), the relaxation, which was originally introduced in the backdrop of the West Asia conflict and expired on September 30, will now remain in force for IPOs opening on or before March 31, 2027.

Under the framework, IPO-bound companies can increase or decrease the size of their fresh issue by up to 50 per cent without submitting new draft offer documents to the market regulator.

The move is aimed at helping companies respond more effectively to changing market conditions and investor demand.

In an email dated October 12, SEBI said lead managers may file updated offer documents reflecting the revised issue size, provided there is no change in the primary objective of the issue.

Merchant bankers will also be required to provide a justification for any revision in the offer size.

The regulator further directed investment bankers to ensure that all relevant changes are disclosed to investors through an addendum and that the offer documents continue to comply with applicable regulations.

Market participants said the extension follows representations made by industry stakeholders who had urged the regulator to continue the flexibility amid persistent geopolitical tensions and evolving market conditions.

The decision comes at a time when activity in the primary market remains robust. September emerged as one of the busiest months for IPOs, with more than 34 companies collectively raising Rs 39,380 crore, accounting for around 42 per cent of the total funds mobilised during the 2026-27 financial year so far.

Overall, 78 companies had raised approximately Rs 94,276 crore through IPOs as of September in FY27.

The record fundraising was also supported by the listing of the National Stock Exchange (NSE), which became the largest IPO of the current financial year and the second-largest public issue in India's capital market history, contributing significantly to September's fundraising tally.