The Securities and Exchange Board of India (SEBI) has extended the relaxation allowing companies to increase or decrease the size of their fresh issue in an initial public offering (IPO) by up to 50% without filing a fresh draft offer document.
The extension applies to IPOs opening on or before March 31, 2027, according to a statement issued by the Association of Investment Bankers of India (AIBI) on Tuesday.
The relaxation was earlier available for draft red herring prospectuses (DRHPs) filed until September 30, 2026. The extension is aimed at easing the fundraising process and giving issuers and merchant bankers greater flexibility to respond to changing business requirements and market conditions.
AIBI, the industry body representing investment bankers, welcomed the decision, saying the relaxation had helped facilitate IPO launches and supported capital formation during the July-September quarter.
During the quarter, 69 mainboard IPOs raised ₹90,482 crore, while 92 small and medium enterprise (SME) public issues mobilised ₹4,167 crore. Together, they raised ₹94,649 crore.
Under the revised framework, companies can increase or decrease their fresh issue size by up to 50%, provided the main objects of the issue remain unchanged and the prescribed compliance requirements are met.
The lead manager must file an updated offer document reflecting the revised issue size, update the relevant sections of the DRHP and make an addendum publicly available. It must also conduct adequate due diligence and ensure that the revision is appropriately justified.
AIBI said it had made representations to SEBI highlighting operational challenges faced by issuers and merchant bankers when fresh issue sizes need to be revised during the IPO process.
“IPO sizes may need revision with evolving business needs and market conditions. This Sebi’s relaxation reduces procedural hurdles and makes the IPO process more efficient. AIBI welcomes Sebi’s move to provide greater flexibility to issuers and merchant bankers. This is a balanced step that facilitates capital raising while safeguarding transparency, due diligence and investor protection,” AIBI Chairman Mahavir Lunawat said.
(With Agency Inputs)