SEBI extends relaxation for IPOs to change their fresh issue size till March 2027

In an email communication to the Association of investment bankers of India (Aibi), Securities and exchange board of India (Sebi) extended the relaxation for issuers with approval to launch initial public offers (IPOs) to change (increase or decrease) the fresh issue portion of their issues up to 50% till March 31, 2027. The present decision extends the relaxation made by the regulator to allow issuers to revise their issue size until September 30, 2026, following volatility and uncertainty in the market due to the West Asia conflict.

The extension will allow issuers to make the changes to their fresh issue size without filing fresh draft documents with the regulator. All issuers whose IPOs open on or before March 31, 2027 will be eligible for this extension. The decision was taken by the regulator following representations from Aibi highlighting the challenges faced by issuers and merchant bankers in revising the size of fresh issues during the IPO process.

The regulator also specified that the book running lead managers can only file the revised offer documents with updated fresh issue size if the main objective of the issue has not changed and the bankers comply with all relevant regulations. Additionally, the bankers will be required to conduct adequate due diligence and ensure that the revision is appropriately justified, along with issuing a public addendum informing the investors and market participants about the change in the issue size.

Aibi said in a press release that the relaxation is expected to provide greater flexibility in responding to evolving business requirements and market conditions, while reducing procedural hurdles and improving operational efficiency in the capital-raising process.