RR Kabel To Be First IPO Company To List Under T+3 Cycle
SEBI has made IPO listing time of T+3 days mandatory from Dec. 1, but for those on or after Sept. 1 till Nov. 30, it is voluntary.
Bankers are pushing companies to list their shares within three days of the close of the initial public offering, in line with the Securities and Exchange Board of India’s recent circular on halving the timeline to T+3 from the close of an IPO.
The circular, bringing down IPO listing time from T+6 days to T+3 days, would be made applicable in two phases, according to SEBI. For issues on or after Sept. 1 until Nov. 30, the new timeline would be voluntary. However, it would become mandatory on Dec. 1.
However, most of the companies listed since Sept. 1 have continued to debut on the stock exchanges on a T+6 basis. Ratnaveer Precision Engineering Ltd. was among the first to list on a T+3 basis on Sept. 13, after the issue closed on Sept. 11. RR Kabel is going to be the first company to get listed on the T+2 timeline as it will be making its stock market debut on Sept. 20, that is two working days after the IPO closed on Sept. 15.
The September-December period is more of a transitional stage; the onus is on the bankers and registrars to get everything right, according to a banker, who spoke with BQ Prime on the condition of anonymity. SEBI has put the buffer period for the system to be in place and the transition to happen smoothly, he said.
JSW Infrastructure Ltd., too, may take the T+3 listing route, according to another banker who spoke on the condition of anonymity as the information is not public. The JSW Group company’s IPO, priced in the Rs 113–119 per share range, will open on Sept. 25 and close on Sept. 27.
The reduced timeline has been made voluntary for all public issues opening on or after Sept. 1. The proposal becomes a mandate on Dec. 1. The proposal to reduce the listing timeline to T+3 days from T+6 days was approved in the regulator's June board meeting.
The proposal, as per experts, is expected to benefit both issuers and investors. The issuers would receive their funds quickly, and investors would get the allotted shares in reduced time.
All market participants involved in IPOs have tested the system for T+3 days, and it will ensure that the resources of all stakeholders—like stock exchanges, banks, depositories, and brokers—in the public issue process will be deployed for a shorter period, SEBI said.