The Securities and Exchange Board of India (SEBI) on Tuesday granted one-time relaxations for companies, extending the validity of IPO approvals and easing compliance pressure related to minimum public shareholding (MPS), as volatile markets continue to weigh on capital-raising activity.
Under existing norms, issuers are required to launch their IPOs within 12 months of receiving SEBI’s observations. However, ongoing geopolitical tensions in West Asia, subdued investor participation and weak secondary market performance have led several companies to defer or recalibrate their fundraising plans.
“The one-time relaxation given by SEBI will support IPO-bound companies with approvals nearing expiry by providing additional time and flexibility. It enables issuers to better assess market conditions and strategically time their IPO launches amid heightened volatility and subdued sentiment,” said Mahavir Lunawat, Chairman, Association of Investment Bankers of India.
The extension will be subject to issuers submitting updated offer documents along with an undertaking from the lead manager confirming compliance with the Issue of Capital and Disclosure Requirements (ICDR) regulations at the time of launch.
Several IPO-bound companies were nearing the end of their approval window, particularly those that received SEBI clearance between April and June 2025. These include Veritas Finance, Credila Financial Services, Hero FinCorp, Greaves Electric Mobility and Dorf Ketal Chemicals.
Bankers said many of these issuers have held back launches due to valuation concerns and weak post-listing performance of recent IPOs.
MPS relief
In a separate circular, SEBI also granted a one-time relaxation from penal provisions related to meeting the 25 per cent minimum public shareholding (MPS) compliance norms. The relief applies to listed entities whose deadlines fall between April 1 and September 30, 2026.
During this period, stock exchanges and depositories have been directed not to initiate penal actions such as fines or freezing of promoter shareholding for non-compliance. Any such actions already initiated will be withdrawn.
“Any penal actions initiated by the stock exchanges or depositories against such listed entities for non-compliance with MPS requirements during the period from April 1, 2026 till date may be withdrawn,” it said.
The regulator said the decision was taken following industry representations highlighting difficulties in meeting MPS norms amid market volatility linked to global developments.
Such relieves were provided during the Covid-19 pandemic as well. Both measures come into immediate effect.