IPO, rights issue approval timeline: SEBI extends validity till September 30 in wake of West Asia crisis

Amid ongoing tensions in West Asia, markets regulator Sebi on Tuesday extended the validity of IPO approvals till September 30 and granted one-time relaxation to entities not complying with minimum public shareholding (MPS) norms.

The move is expected to benefit several companies that had deferred or recalibrated their public issue plans due to volatile market conditions.

In separate circulars, Sebi said observation letters expiring between April 1, 2026 and September 30, 2026 will now remain valid till September 30, 2026.

Also, no penal action will be taken against listed companies whose deadline to comply with MPS requirements falls between April 1 and September 30, 2026, Sebi said.

The regulator had granted similar relief during the coronavirus pandemic.

Under the existing norms, companies are required to launch their public issues within 12 months or 18 months, as applicable, from the date of issuance of Sebi's observations.

However, the regulator said it has received representations from industry bodies highlighting difficulties faced by issuers in mobilising resources, accessing capital markets as well as in meeting 25 per cent MPS requirements amid volatile market conditions due to the prevailing uncertainty, including geopolitical tensions in West Asia and subdued investor participation.

"Considering the representation of the industry body, the prevailing uncertain market conditions due to ongoing geopolitical tensions and subdued investor participation, Sebi has decided to grant one-time relaxation to extend validity of Sebi's observations letters, expiring between April 1, 2026-September30, 2026 till September 30, 2026, " the regulator said.

"Further, any penal actions initiated by the stock exchanges or depositories against such listed entities for non-compliance with MPS requirements during the period from April 1, 2026 till date may be withdrawn," it added.

The existing framework prescribes measures such as fines, freezing of promoter shareholding and other actions against companies failing to meet MPS norms.

IPOs in FY27

March 2026 saw at least 38 companies, including SBI Funds Management, Rentmojo, Cosmic PV Power and Manipal Health Enterprises Ltd, file their draft red herring prospectuses (DRHPs) with SEBI.

In addition, Singapore-based Sembcorp Industries' Indian renewable energy arm, Sweden-based Modern Times Group's subsidiary PlaySimple, TPG-backed online lending platform Fibe and Tiger Global-backed BatterySmart are also likely to file DRHPs soon, they added.

The IPO market is expected to gain further momentum in the first quarter of FY2026-27, supported by a robust pipeline, with a large number of companies both awaiting SEBI approval and holding valid approvals for launch, it added.