News

SEBI Reduces Rights Issue Timeline to 23 Days to Accelerate Fundraising.

Banking & Finance | Dated: 19 Mar 2025

In March 2025, the Securities and Exchange Board of India (SEBI), based in Mumbai (Maharashtra), reduced the timeline for completing rights issues from 126 days to just 23 days. This is a significant improvement compared to the current average timeline of 317 days. The new rule will come into effect on April 7, 2025.

🎯 Key Highlights:

- Rights issues must now stay open for 7 to 30 days. The verification of application bids and the finalization of allotments will be handled by stock exchanges (SE), depositories, and registrars.
- Additionally, exchanges and depositories must develop an automated validation system within six months to make the process smoother.

💡 Other Important Facts:

(i) To simplify the process, SEBI has simplified the Letter of Offer (LoF), which will now only require key details like the purpose of the issue, price, record date, and entitlement ratio.
(ii) A monitoring agency must now oversee how the funds raised from all types of rights issues are used. Previously, issuers raising less than Rs 50 crore through rights issues didn’t need to appoint a monitoring agency.
(iii) With the new system, companies can raise funds more quickly than through the preferential allotment route, which takes 40 working days. This makes rights issues more efficient and investor-friendly.

📚 Test Your Knowledge:

Recently, SEBI reduced the rights issue timeline to how many days to accelerate fundraising?

Correct Answer: 23 days

🚀 Quick Recap:

About SEBI

Chairperson: Tuhin Kanta Pandey
Headquarter : Mumbai