SEBI Mulls New Product Combo To Cut Fundraising Timeline In Half

India's securities market watchdog is working to speed up the approval processes for the booming public issues via a new product for share sale that will combine rights and preferential offerings.

The Securities and Exchange Board of India is working to cut the process timeline from 42 days to 23 days, with no merchant banker needed to manage the sale through this product, according to chairperson Madhabi Puri Buch.

Capital formation is an important part of the capital market, and Asia's fifth-largest stock market ranks first on the total number of initial public offerings and issuances, the SEBI chair said. "From the jurisdiction point of view, we are third. From a growth rate point of view, we are on top."

SEBI is also working on a template IPO document that will simplify the prospectus. The document will have fill-in-the-blanks, and if there are any ifs and buts, there will be a separate column to explain, she said. "The document will be precise, with no complex language. We are hoping to bring down the approval time further."

Buch clarified common misunderstandings among market participants, noting that some have misinterpreted the return of documents as minor issues, such as differences in active versus passive voice.

However, the actual reasons for document returns are significant regulatory concerns, such as a director under investigation for fraud affecting the approval process.

Buch also disclosed the market regulator’s plans to implement artificial intelligence-based processing for IPO approvals. This innovation is expected to streamline the normal track so efficiently that a faster track will no longer be necessary.