Mumbai: The SEBI IPO relaxation for companies planning to list on the stock market has been extended. Until 31 March 2027, a company can raise or cut the size of the fresh issue in its initial public offering (IPO) by up to 50 per cent without filing a new set of draft papers, the Securities and Exchange Board of India (SEBI) has decided.
The earlier deadline was 30 September 2026. SEBI conveyed the extension in a letter dated 12 October to the Association of Investment Bankers of India (AIBI), Moneycontrol, Mint and Business Standard reported. AIBI announced it in a press release on Tuesday, 13 October. Here is what the change means, in simple words.
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What is the SEBI IPO relaxation?
When a company wants to sell its shares to the public for the first time, it files a draft offer document with SEBI. This is called the draft red herring prospectus, or DRHP. It tells investors about the company, its risks, and how much money it wants to raise.
Under the normal rules, if a company changes the size of its fresh issue by more than 20 per cent, it must file fresh draft papers. That means going through the review process again, which costs time and money.
Under the relaxation, the limit is 50 per cent instead. For example, a company that planned to raise Rs 1,000 crore through new shares could raise anywhere from Rs 500 crore to Rs 1,500 crore without filing again, as long as it meets the conditions.
According to Business Standard, SEBI’s letter said: “The above relaxation on change in fresh issue size shall be applicable for issues (IPO) opening on or before March 31, 2027.”
Fresh issue and offer for sale: what is the difference?
An IPO can have two parts. In a fresh issue, the company creates new shares and the money goes to the company. In an offer for sale, existing owners sell some of their shares and the money goes to them, not to the company.
The relief covers only the fresh issue. It does not cover the offer for sale, The Hindu BusinessLine reported.
Conditions companies must follow
The extra room comes with rules. Based on reports in Business Standard, Moneycontrol, NDTV Profit and The Economic Times:
- The main objective of the issue must stay the same.
- The company must explain why it is changing the size. NDTV Profit reported that companies will need to apply to SEBI with this justification.
- The lead managers, the investment banks that run the IPO, must check that the offer document follows SEBI rules and carry out due diligence.
- The lead manager must update the relevant sections of the DRHP to show the new issue size.
- All changes must be made public through an addendum, which is an extra document added to the offer papers.
Why was the relief given?
SEBI first allowed the 50 per cent flexibility in April 2026. Reuters reported at the time that the war involving Iran and tension in West Asia had made it hard for companies to stick to their original IPO plans. The relief was meant to last till 30 September.
The new extension follows requests from AIBI, which pointed to practical problems that companies and bankers face when they revise issue sizes during the IPO process. Business Standard, citing sources, said the decision came as the geopolitical situation remains strained.
Mahavir Lunawat, chairman of AIBI, said IPO sizes may need to change as business needs and market conditions change. “This SEBI’s relaxation reduces procedural hurdles and makes the IPO process more efficient,” he said, according to The Hindu BusinessLine. He added that the step gives flexibility while protecting transparency, due diligence and investor interests.
A busy season for IPOs
AIBI said the relaxation had helped more companies launch IPOs. These figures for July to September 2026 were shared by AIBI and reported by The Hindu BusinessLine and The Economic Times:
- 69 main board IPOs raised Rs 90,482 crore.
- 92 SME IPOs, which are issues by small and medium companies, raised Rs 4,167 crore.
- Together, that is Rs 94,649 crore, close to Rs 1 lakh crore in three months.
September was the busiest month, with 34 main board IPOs raising about Rs 39,380 crore, The Economic Times and Business Standard reported. Business Standard added that the National Stock Exchange’s own IPO, the largest of this financial year so far, listed in September.
What has not been extended
In April, SEBI also gave six more months to companies whose IPO approval letters, called observation letters, were due to expire between 1 April and 30 September 2026. The Hindu BusinessLine reported that this extension ended on 30 September and that no further extension has been announced so far.
What it means for you as an investor
For investors, the main point is simple. The size of an IPO can change after the first draft papers are filed, so the issue you see at launch may be bigger or smaller than first planned. Before you apply, check the final offer document and any addendum for the latest size and how the money will be used.
A change in size does not by itself make an IPO good or bad. Look at the business, its debts and its risks, which are set out in the offer papers. Our guide on upcoming and current IPOs and how to choose the best one explains what to look for.
SEBI has also been running investor awareness drives. Read about the SEBI Samajh Se Investing Simple campaign, and about how retail investors are shaping a new stock market culture in India.
FAQ
Till when does the relief apply?
To IPOs that open on or before 31 March 2027.
How much can a company change its issue size?
Up to 50 per cent of the fresh issue, without filing fresh draft papers. The normal limit is 20 per cent.
Does it apply to the offer for sale?
No. It applies only to the fresh issue, according to The Hindu BusinessLine.
Who asked for the extension?
The Association of Investment Bankers of India, the body that represents merchant bankers.
Sources
- Reuters, 13 October 2026: SEBI extends easier IPO rules till March 2027, citing a statement from the bankers’ association; 50 per cent change without a new prospectus; applies to IPOs opening on or before 31 March 2027.
- Reuters, 15 April 2026: SEBI first allowed IPO size changes of up to 50 per cent till 30 September because of the Iran war and West Asia tension.
- Moneycontrol, 13 October 2026: SEBI letter to AIBI dated 12 October; conditions on objective, justification, lead manager checks and addendum.
- Business Standard, 13 October 2026: quote from the SEBI letter; conditions; September IPO figures and the NSE listing.
- Mint, 13 October 2026: SEBI letter to AIBI on 12 October; relief earlier available for issues opening before 30 September.
- The Hindu BusinessLine, 13 October 2026: AIBI press release; July to September IPO figures; Mahavir Lunawat quote; fresh issue only, not offer for sale; observation letter extension ended.
- NDTV Profit, 13 October 2026: companies must apply to SEBI with justification; normal limit of 20 per cent.
- The Economic Times, 13 October 2026: quarterly and September IPO figures; lead manager duties; AIBI comments.