Fundraises Will Be Quicker! SEBI Slashes Rights Issue Timeline to Just 23 Days

The Securities and Exchange Board of India (SEBI) has introduced a game-changing reform, slashing the timeline for completing rights issues from 126 days to just 23 working days, effective April 7, 2025. This move aims to accelerate capital-raising for companies, enhancing efficiency in the Indian financial market.

In a recent circular, SEBI amended Regulation 85 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, mandating that rights issues be finalized within 23 days from the date the issuer’s board approves the plan. The subscription window has also been streamlined, with a minimum of seven days and a maximum of 30 days, as per Regulation 87. Additionally, SEBI has granted issuers flexibility to allot shares to specific investors, while stock exchanges, depositories, and registrars will handle bid validation and allotment finalization.

This overhaul, applicable to rights issues approved post-April 7, follows SEBI’s push to modernize capital market processes. The regulator’s circular emphasizes reducing procedural delays, making fundraising more agile for listed companies. Market experts view this as a boon for businesses needing swift liquidity amid evolving economic demands.

Meanwhile, SEBI’s first board meeting under new Chairperson Tuhin Kanta Pandey, scheduled soon, will tackle a packed agenda. Key proposals include introducing UPI-like security features for demat accounts to bolster investor protection, ensuring clearing corporations’ independence, expanding the definition of qualified institutional buyers (QIBs), and revising fee structures for research analysts. The UPI-inspired system for demat accounts aims to mirror the seamless, secure framework of digital payments, addressing rising cyber risks.

These reforms signal SEBI’s commitment to balancing market growth with investor safety. As the April 7 deadline nears, companies and stakeholders are gearing up for a faster, more flexible rights issue landscape, potentially reshaping India’s equity fundraising dynamics.