Coming up: 'Demystified filing' for faster IPO nods. Sebi chief explains how it will work

Sebi chief Madhabi Puri Buch on Friday detailed plans to simplify IPO filings. Buch highlighted the regulator's efforts to demystify offer documents and reduce approval timelines, ensuring faster, efficient public listings.

Speaking at a capital market conference organized by FICCI, Buch said Sebi is looking at a 'demystified filing' process for IPOs. This new approach will feature a fill-in-the-blank format and a separate section to address complexities, making the documentation precise and user-friendly. 

"The industry standards forum will be consulted for this. The format or template will largely remain the same for all sizes of IPOs," Buch said. She emphasized that the new document would be straightforward, with unnecessary details omitted and a dedicated column for any complexities.

This initiative aims to simplify the listing process and enhance the clarity of offer documents.

The market regulator is also leveraging artificial intelligence to expedite approvals. As of July, Sebi had processed around 86 IPO documents, with 65 receiving approval or observation letters. However, Buch noted that incomplete filings and inconsistencies in applications have caused delays. "Such faulty applications are ‘cluttering the path’ for the approval of well-prepared IPO applications," she stated.

In addition to simplifying IPO filings, SEBI is also bringing in a combination of rights issues and preferential allotments. This new combo product will integrate the best aspects of both methods, significantly reducing the processing time from 42 days to 23 days. 

Buch elaborated, "For an already listed company opting for a rights issue leading to a preferential allotment, there will be no need for SEBI’s involvement." Only a submission detailing the purpose of the fundraising will be required, eliminating the need for a merchant banker in the process.

These innovations aim to make fundraising simpler and faster. Sebi mandated companies to provide offer document details in video formats. Now, with the proposed changes, the regulator is set to further ease the process. 

Buch mentioned that a consultation paper on the combo product would soon be released to gather industry feedback.

Buch’s remarks underscore SEBI's commitment to enhancing the efficiency of India’s capital markets. By demystifying offer documents and introducing new fundraising methods, SEBI aims to maintain its leading position in capital formation within Asia’s fifth-largest stock market. "We are working on simplifying the listing process and the documentation," Buch said.