The Securities and Exchange Board of India (SEBI), the main rule maker for the stock market in India, has been working on getting companies listed on the stock exchange faster. This process is called an Initial Public Offering (IPO).
SEBI has been making changes to shorten the amount of time it takes to approve IPOs. This is good news for companies that want to raise money by going public. It’s also positive for investors who are interested in buying shares in new companies.
On average, it took SEBI 107 days to approve IPOs in the financial year 2023-24 (FY24). This is a 17% decrease compared to the previous year (FY23) when the average approval time was 129 days.
There are a few reasons why SEBI is trying to get IPOs approved quicker.
- More interest in the stock market: There has been a lot of interest in investing in the Indian stock market recently. This means more companies are looking to raise money through IPOs. By speeding up approvals, SEBI can help companies take advantage of this interest.
- More staff and technology: SEBI has increased the number of employees working on IPO approvals. They are also using new technology, such as artificial intelligence (AI) tools, to help them review applications faster.
- Making it easier for companies: SEBI has also made some changes to the IPO approval process that make it easier for companies to comply with the rules. For example, some merchant bankers (companies that help businesses with IPOs) can now self-certify certain documents, which saves time.
For businesses, a faster IPO approval process means they can raise money more quickly. This can be helpful for companies that need money to grow their business. Investors also benefit from a faster approval process because they can invest in new companies sooner.
However, it’s important to note that a faster approval process doesn’t mean that Sebi is being less careful about approving IPOs. SEBI is still responsible for making sure that companies meet all the requirements before they can go public.
What to Look Out For
While a faster IPO process is generally good news, there are still a few things for investors to keep in mind. Just because an IPO is approved quickly doesn’t mean it’s a good investment. Investors should always do their own research before investing in any company.
Overall, SEBI efforts to speed up IPO approvals are a positive development for the Indian stock market. This will make it easier for companies to raise money and for investors to find new investment opportunities. However, investors should still be careful and do their research before investing in any IPO.