November 29, 2023

Indian IPOs & Weekends

Guest Author | Equity Investing

Starting December 1st, all IPOs must list within 3 days of their window closing.

Was this not already happening?

An optional window was launched from September 1st to December 1st, 2023. In this window, the companies going public could choose to indicate a T+6 timeline on the prospectus or a shorter one. However, most companies were attempting to list within 3 days even if a longer timeline was indicated on the prospectus.

Were any redundant processes dropped to reduce the timeline?

No, the process steps remain the same. However, different organizations involved, like banks, exchanges, and registrars, will complete their tasks faster. Thus, the T+6 timeline has shortened to T+3, even though process complexity hasn’t decreased.

Remarkably, many IPOs have listed in 3 days in recent months during the optional period.

How have we improved market-wide efficiency so quickly?

We have been smartly planning IPO dates. With a 3-day working timeline, IPOs closing on Wednesday or later benefit from extra weekend days. This eases the workload for exchanges, registrars, and banks.

For example, the Tata Technologies IPO closed on November 24th and is listing on November 30th. Excluding the three holidays from November 25th-27th, it meets the T+3 requirement.

Hopefully, over the next few months, all market intermediaries will gain confidence to close an issue on a Monday or a Tuesday. This could enable same-week listings. In any case, this is still a feather in our caps. 🇮🇳🚀

This guest post is by Mohit Mehra. Mohit splits his time between Zerodha & Rainmatter, sharing his experiences on this blog.

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