SEBI Extends IPO Fresh Issue Size Relaxation Until March 2027

Mumbai: The Securities and Exchange Board of India (SEBI) has extended a relaxation allowing companies to increase or reduce the fresh issue component of their initial public offerings (IPOs) by up to 50 per cent without filing fresh draft offer documents. The relief will apply to IPOs opening on or before March 31, 2027, according to the Association of Investment Bankers of India (AIBI). 

The extension follows representations from AIBI highlighting practical difficulties faced by companies and merchant bankers in revising fresh issue sizes during the IPO process. The earlier window ended on September 30, 2026.

“IPO sizes may need revision with evolving business needs and market conditions. SEBI’s relaxation reduces procedural hurdles and makes the IPO process more efficient,” said Mahavir Lunawat, Founder of Pantomath Financial Services Group and Chairman of AIBI.

Lunawat said the measure would give issuers and merchant bankers greater flexibility while retaining requirements relating to transparency, due diligence and investor protection.

Under the regular framework, a change exceeding 20 per cent in the estimated fresh issue size requires a fresh draft filing. The relaxation allows companies to revise that component by up to 50 per cent, subject to prescribed conditions.

The main objects of the issue must remain unchanged, and the revision must be adequately justified. Lead managers must conduct due diligence, update the relevant sections of the draft red herring prospectus and make an addendum publicly available to inform investors of the changes.

The relief concerns the fresh issue component, through which a company raises capital for its own use. It does not extend to the offer-for-sale component, under which existing shareholders sell their shares.

SEBI first introduced the issue-size relaxation in April 2026 amid market uncertainty linked to the West Asia conflict. It was among several measures intended to ease fundraising difficulties as companies reconsidered the timing and size of their offerings.

AIBI said the flexibility had helped facilitate IPO launches. According to figures cited by the association, 69 mainboard IPOs raised ₹90,482 crore during the July–September quarter, while 92 small and medium enterprise IPOs mobilised ₹4,167 crore, taking total fundraising to ₹94,649 crore. These figures represent overall IPO proceeds, rather than funds raised solely through fresh issues or directly attributable to the relaxation.

The issue-size concession is separate from SEBI’s earlier one-time extension of IPO observation letters. That measure allowed letters due to expire between April 1 and September 30, 2026, to remain valid until September 30, giving affected companies additional time to launch their offerings amid difficult market conditions.

The latest announcement concerns flexibility in fresh issue size and should not be read as an extension of the validity of IPO observation letters.

Companies seeking to use the concession must continue to meet the applicable requirements for launching their offerings.