SEBI extended its IPO issue-size relaxation until March 31, 2027. Companies can now change the fresh issue component by up to 50 percent without filing new documents. Mahavir Lunawat said, “This SEBI’s relaxation reduces procedural hurdles and makes the IPO process more efficient.” This move helps issuers manage evolving market conditions.
The Securities and Exchange Board of India (SEBI) has extended its relaxation allowing companies to increase or reduce the size of the fresh issue component of their initial public offerings (IPOs) by up to 50 per cent without filing fresh draft offer documents, until March 31, 2027.
The extension follows representations from the Association of Investment Bankers of India (AIBI), flagging practical difficulties faced by issuers and merchant bankers in revising issue sizes during the IPO process. The relaxation will apply to IPOs opening on or before March 31, 2027, AIBI said in a press release on Tuesday.
Sources said the regulator communicated its decision to AIBI on Monday.
The industry body said the relaxation had facilitated a higher number of IPO launches, contributing to nearly ₹1 lakh crore in capital formation in the July-September quarter.
Companies raised ₹90,482 crore through 69 mainboard IPOs during the quarter, while 92 SME IPOs raised ₹4,167 crore, taking the combined amount to ₹94,649 crore.
“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,” said Mahavir Lunawat, founder of Pantomath Financial Services Group and Chairman of AIBI.
More flexibility
He said the measure would provide greater flexibility to issuers and merchant bankers while safeguarding transparency, due diligence and investor protection.
Under the regular framework, a change of more than 20 per cent in an IPO’s issue size requires the issuer to file fresh draft offer documents. The relaxation allows companies to revise the fresh issue component by up to 50 per cent, subject to specified conditions, without restarting the regulatory filing process.
The relief applies to the fresh issue component, through which companies raise new capital, and not the offer-for-sale (OFS) portion, in which existing shareholders sell their shares.
Key objective
Companies must ensure that the primary objective of the IPO remains unchanged and justify the revision. Lead managers must undertake compliance with SEBI regulations, conduct due diligence and update the relevant sections of the draft red herring prospectus (DRHP). An addendum reflecting the changes must also be made public.
SEBI had previously extended the relaxation until September 30, 2026, as geopolitical tensions and market uncertainty weighed on investor sentiment. Separately, the regulator extended the validity of IPO observation letters due to expire between April 1 and September 30, 2026, by six months, giving issuers more time to launch their offerings.
The latter extension ended on September 30, with no further extension announced so far.