The Securities and Exchange Board of India (Sebi) has granted a one-time relaxation to companies planning to go public, allowing them to use their approvals for longer amid ongoing geopolitical tensions and weak investor sentiment.
In a circular issued on Tuesday, the market regulator said observation letters (final approvals) expiring between 1 April and 30 September 2026 will now remain valid until 30 September 2026. The extension is subject to an undertaking from the lead manager confirming compliance with regulatory requirements when submitting updated offer documents.
Sebi rules require companies to launch their IPOs within a year of receiving final approvals . Missing this window forces issuers to file fresh draft red herring prospectuses, update financials, and undergo the entire review process again, adding to costs and delaying market entry.
But issuers have been grappling with volatile markets and slowing capital flows due to the US-Iran war, forcing several to defer or recalibrate their initial public offering (IPO) plans. Mint reported on 25 March that dampening market sentiment and global uncertainty had put about ₹18,000 crore of planned fundraising at risk as companies looking to tap the capital markets braced for expiring IPO approvals.
Thirteen mainboard companies are nearing their 12-month deadlines to launch their issues by June or lose regulatory approval. These include the Munjal family’s ₹3,600-crore Hero Fincorp Ltd offer, Morgan Stanley-backed Continuum Green Energy Ltd’s ₹3,650 crore plan, and Norwest Venture Partners-backed Veritas Finance Ltd’s proposed IPO worth ₹2,800 crore, according to Prime Database.
Mahavir Lunawat, founder of Pantomath Financial Services, said Sebi’s move “enables issuers to better assess market conditions and strategically time their IPO launches amid heightened volatility and subdued sentiment”.
Relief for listed firms, too
The market regulator also eased pressure on companies that have already been listed by granting a one-time relaxation on minimum public shareholding (MPS) norms, an area in which compliance has become increasingly challenging in volatile markets.
“Considering the above representation and the prevailing market conditions, it has been decided to grant one-time relaxation from the applicability of penal provisions under the Master Circular for listed entities whose due date for compliance with MPS requirements falls during the period from 1 April 2026 to 30 September 2026,” Sebi said in a separate circular on Tuesday.
