SEBI Extends IPO Issue-Size Relaxation Until March 2027

On 12 October 2026, the Securities and Exchange Board of India (SEBI) extended a temporary relaxation on changes to the fresh-issue size in Initial Public Offerings (IPOs). The relaxation applies to IPOs opening on or before 31 March 2027.

Issue-Size Relaxation

Under the dispensation, an issuer may increase or decrease the size of its fresh issue by up to 50% without filing a fresh draft offer document. The issuer must retain the main objects of the issue and meet the prescribed compliance requirements. The earlier deadline applied to draft red herring prospectuses (DRHPs) filed up to 30 September 2026. The extension therefore covers eligible IPOs opening by 31 March 2027.

IPO and Offer Documents

An IPO is a public offer of securities by a company to raise funds from investors. An IPO may include a fresh issue, an offer for sale by existing shareholders, or both. In a fresh issue, the company issues new securities and receives the proceeds. In an offer for sale, existing shareholders sell their securities, and the sale proceeds go to those shareholders. A DRHP is an offer document containing information about the issuer, its business, financial position, risks and proposed issue.

SEBI and IPO Market Participants

SEBI is India’s securities-market regulator, established under the Securities and Exchange Board of India Act, 1992. Merchant bankers registered with SEBI manage public issues and support issuers in meeting applicable disclosure and procedural requirements. The Association of Investment Bankers of India (AIBI), an industry association for investment bankers, had made representations on operational challenges faced by the industry and welcomed the extension.

IPO Activity in July–September 2026

During the July–September quarter, 69 mainboard IPOs raised ₹90,482 crore, while 92 SME public issues raised ₹4,167 crore. The combined amount raised through these issues was ₹94,649 crore.

Important Facts for Exams

• SEBI was established under the Securities and Exchange Board of India Act, 1992.
• A fresh issue creates new securities, and its proceeds accrue to the issuing company.
• In an offer for sale, existing shareholders sell their securities to the public.
• A DRHP contains disclosures about the issuer and the proposed public issue.

The relaxation permits a fresh-issue-size change of up to 50% without a fresh draft offer document, subject to conditions. It applies to IPOs opening on or before 31 March 2027.