SEBI Extends IPO Fresh Issue Relaxation Till March 2027, Companies Can Revise Issue Size By Up To 50%

Mumbai: The Securities and Exchange Board of India (SEBI) has extended its relaxation allowing companies to revise the fresh issue size of initial public offerings (IPOs) by up to 50 per cent without submitting fresh draft documents.

According to the Association of Investment Bankers of India (AIBI), the revised deadline is March 31, 2027, replacing the earlier September 30, 2026 deadline.

Greater Flexibility For IPO-Bound Companies

The extension follows representations from AIBI highlighting difficulties faced by companies and merchant bankers when changing fundraising requirements during the IPO process.

Under normal rules, companies must file fresh draft documents if the estimated fresh issue size changes by more than 20 per cent.

The relaxation permits revisions of up to 50 per cent, subject to regulatory conditions.

What Conditions Must Companies Follow?

Companies must ensure that the original objectives of their IPO remain unchanged.

Merchant bankers must justify revisions, conduct due diligence, update relevant prospectus disclosures and publish an addendum informing investors.

Importantly, the relaxation applies only to fresh issues, where companies raise funds directly. It excludes offer-for-sale transactions involving existing shareholders.

AIBI Welcomes SEBI's Decision

Mahavir Lunawat, Chairman of AIBI and Founder of Pantomath Financial Services Group, said changing business requirements and market conditions often force companies to reconsider IPO sizes.

He said the extension would reduce procedural hurdles while maintaining transparency and investor protection.

IPO Fundraising Remains Strong

According to AIBI, 69 mainboard IPOs raised Rs 90,482 crore during July-September 2026.

Another 92 SME IPOs mobilised Rs 4,167 crore, taking combined fundraising to Rs 94,649 crore.

These figures cover overall IPO proceeds and cannot be attributed entirely to the relaxation.

Separate From Observation Letter Extension

SEBI initially introduced the concession in April 2026 amid market uncertainty linked to the West Asia conflict.

The latest extension does not change IPO observation letter validity. Companies must continue meeting all applicable regulatory requirements before launching public offerings.