If you are investing in IPOs, there is good news for you. From 1st December, there has been a major change in the IPO market with the implementation of a new rule called T+3. This means that the listing of shares must be done within three days of the IPO launch, as opposed to the previous T+6 rule. SEBI had issued a circular in August, reducing the IPO listing timeline, and some companies voluntarily followed the T+3 rule and listed their shares. However, now this rule has become mandatory, requiring companies to list shares within three days of the IPO, reducing the lock-in period for investors.
The new IPO rules not only benefit investors but also companies. It allows companies to raise funds quickly through IPOs in a shorter period of time. Additionally, if shares are not allotted in the IPO, investors will receive their money back sooner, and they won’t have to wait long for profits. Previously, this rule was optional, but SEBI had proposed to reduce the IPO listing timeline from 1st September 2023. Since then, however, the rule has been optional. According to the circular, this rule was voluntarily applicable to all IPOs launched after 1st September. Out of the recent five IPOs, four – IRDA, Tata Technologies, Gandhar Oil, and Fedbank Financial Services – have been listed based on the T+3 rule. The IPO of Flight Writing was listed under the T+6 rule.
New IPO Rules:
1. Effective from 1st December, a new rule called T+3 has been implemented in the IPO market.
2. Under this rule, the listing of shares will be mandatory within three days of the IPO launch.
3. Previously, the time frame was T+6, which meant listing had to be done within six days.
4. The Securities and Exchange Board of India (SEBI) issued a circular in August to reduce the IPO listing timeframe.
5. Some companies voluntarily followed the T+3 rule and listed their shares earlier.
6. However, now the rule has become mandatory for all IPOs, requiring companies to list their shares within three days.
7. This rule will reduce the lock-in period for investors’ money.
8. The deadline for IPO listing has been reduced, benefiting both investors and companies.
9. The new rule allows companies to raise funds quickly through IPOs.
10. In case of non-allocation of shares in IPOs, investors will receive their money back sooner.
11. Investors will not have to wait for a long time for profits.
12. Previously, the rule was optional, but SEBI proposed to reduce the IPO listing timeframe from 1st September 2023.
13. However, the rule remained optional until the recent circular was issued.
14. According to the circular, the rule was applicable on all IPOs launched after 1st September.
15. Four out of the five recent IPOs, including IRDA, Tata Technologies, Gandhar Oil, and Fedbank Financial Services, followed the T+3 rule.
16. The IPO of Flair Writing was listed under the T+6 rule.
17. The new IPO rules aim to streamline the IPO listing process and provide benefits to investors and companies.
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