Sebi Extends IPO Issue Size Revision Relaxation Till March 2027: Merchant Bankers’ Association

New Delhi: Markets regulator Sebi has extended the relaxation allowing firms to revise the size of their fresh issue by up to 50 per cent without filing a fresh draft offer document for IPOs opening on or before March 31, 2027, according to a statement by the Association of Investment Bankers of India (AIBI) on Tuesday.

The move is aimed at easing the fundraising process.

Earlier, the dispensation was available for draft red herring prospectuses (DRHPs) filed until September 30, 2026.

The Association of Investment Bankers of India (AIBI), the industry body representing investment bankers, welcomed the decision, saying the measure would provide greater flexibility to issuers and merchant bankers in responding to changing business requirements and market conditions.

According to AIBI, the relaxation has facilitated IPO launches, contributing to massive capital formation during the July-September quarter.

During the quarter, 69 mainboard IPOs raised Rs 90,482 crore, while 92 SME public issues mobilised Rs 4,167 crore, taking the total fundraising to Rs 94,649 crore.

Under the revised framework, companies can increase or decrease the size of their fresh issue by up to 50 per cent, provided there is no change in the main objects of the issue and the prescribed compliance requirements are met.

The lead manager will be required to file an updated offer document incorporating the revised issue size, update the relevant sections of the DRHP and make an addendum publicly available. It will also be responsible for conducting adequate due diligence and ensuring that the revision is appropriately justified.

AIBI said it had made representations to Sebi highlighting operational challenges faced by issuers and merchant bankers while revising fresh issue sizes 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.

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