SEBI Reduces Timelines For Refunding IPO Money to Four Days

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Refunding IPO Money to Four Days: Market regulator SEBI decided to reduce the time limit for refunding investors’ IPO money to four days in case of non-receipt of minimum subscription. Currently, Sebi allows up to 15 days for merchant bankers to complete this process.

SEBI Reduces Timelines For Refunding IPO Money to Four Days
SEBI Reduces Timelines For Refunding IPO Money to Four Days

Under this, if the investor does not get the minimum number of related shares or the issue issuer fails to get listed from the stock exchanges or obtain approval of the business, he will have to return the investor’s money in four days. This deadline has been reduced to four days.

Considering that the time limit has been reduced, ASBA (Application Supported by Blocked Amount) is now mandatory for all applicants in a public issue. Under this arrangement, there is no transfer of application money but it is ‘withheld’ in the account of the investor. The amount is taken only after the share allotment.

Further, after the UPI (Unified Payments Interface) arrangement in the public issue, if the intermediaries do not release the respective amount in the ASBA account within four working days from the date of closure of the issue, they will be liable to compensate the investors.

“Based on various consultations with the market participants, it has been decided to reduce the timelines for refund of the money to the investors… to four days,” Sebi said.

NSE reduces market lot size for Nifty 50 derivatives deals

It may be noted that NSE has reduced the market lot size for derivatives deals of shares included in the Nifty 50. The move will reduce the burden of excessive upfront margins for retail traders. The NSE said in a circular that the lot size has been reduced from the current 75 to 50. Now, traders need about Rs 1,73,000 to make a deal. The margin requirement will come down to around Rs 1,16,000 (at current Nifty prices) from July.

How many days it takes to get refund of an IPO?

Sebi says refund of IPO application money in case of partial or non-allotment of shares in an offer should be completed in four days. Currently, Sebi allows up to 15 days to merchant bankers to complete this process.

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