In a bid to ease the IPO process amid market volatility, the Securities and Exchange Board of India (Sebi) has extended its temporary relaxation allowing companies to revise their issue size by up to 50% without filing fresh draft offer documents. The relaxation, which was earlier available for changes of up to 20% without fresh filings, has been extended until March 2027.
The regulator communicated the extension to the Association of Investment Bankers of India (AIBI) on October 12, extending the earlier deadline of September 30, 2026, to March 31, 2027.
Sebi introduced the relaxation in early April amid heightened tensions in West Asia that raised concerns over investor sentiment and market conditions. Under the earlier framework, any change of more than 20% in the proposed issue size required companies to file fresh draft offer documents.
The temporary measure was intended to give issuers greater flexibility to recalibrate their fundraising plans in response to changing market conditions without restarting the regulatory process.
The extension comes amid continued market volatility, which is influencing investor risk appetite and could affect the timing and size of IPOs. It gives companies planning to tap the primary market more room to adjust their fundraising plans as market conditions evolve.
AIBI welcomes extension
The Association of Investment Bankers of India (AIBI) has welcomed Sebi’s decision, saying the earlier relaxation facilitated a higher number of IPO launches, contributing to nearly ₹1 lakh crore in capital formation during the July-September quarter.
Between July and September 2026, mainboard IPOs raised ₹90,482 crore through 69 issues, while SME IPOs raised ₹4,167 crore through 92 issues, according to data shared by AIBI.
Mahavir Lunawat, chairman of AIBI, said the relaxation reduces procedural hurdles and makes the IPO process more efficient by giving issuers and merchant bankers greater flexibility to respond to evolving business needs and market conditions. He added that the move balances fundraising flexibility with transparency, due diligence and investor protection.
The decision follows representations made by AIBI to Sebi highlighting the practical challenges faced by issuers and merchant bankers when revising the size of fresh issues during the IPO process.
Under the revised framework, the lead manager can file an updated offer document reflecting the revised issue size, provided the main object of the issue remains unchanged. The lead manager must ensure compliance with Sebi regulations, update all relevant sections of the draft red herring prospectus (DRHP) and make an addendum public.