Sebi says it's considering 'demystified filing' to speed up IPO approvals

The Securities and Exchange Board of India (Sebi) is considering simpler documents for filing initial public offerings (IPOs), seeking to reduce complexities in the listing process and speed up approvals.

Sebi chairperson Madhabi Puri Buch said on Friday the market regulator is considering "demystified filing" of offer documents that will have a fill-in-the-blank kind of format and a separate section for explaining complexities.

“The industry standards forum will be consulted for this. The format or template will remain largely the same for all sizes of IPOs,” said Buch on the sidelines of a capital markets conference by FICCI.

“The document will be precise; there won’t be a lot of unnecessary things. There will be a separate column to articulate the complexities, if any. We will be simplifying the listing process and the document,” she said.

The regulator is trying to reduce the time taken for processing and approving applications, considering the slew of filings to raise money from the public. The time taken to process approvals has reduced but there were some delays due to incomplete filings, inconsistency in applications or internal due diligence, said Buch.

Erroneous IPO applications are "cluttering the path" for good ones in getting approval. The market regulator is using artificial intelligence for faster approvals and 80 per cent of the work done is through that technology, she said.

The regulator had till July processed around 86 IPO documents. Of these, 65 received observation letters or approval, 16 were returned and four were withdrawn.

Sebi is also considering a combination of rights issue and preferential allotments and will soon bring a consultation paper.

“We will bring a combo product of a rights issue and preferential allotment. It will bring the best of the both. The entire end-to-end processing time will be cut down to half from the current 42 days time taken. For an already listed company going the 'rights' way to preferential allotment, there is no need for Sebi to come in the way,” she said.

She added that only a submission would be required on the purpose of the fund raise or utilization and the need of a merchant banker for the process will be done away with.

The regulator aims to make fundraising simpler and faster. Earlier, it mandated companies filing offer documents to provide details in video formats.