Currently, it requires six business days (6 days of work) for an IPO to become listed.

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SEBI (The Securities and Exchange Board of India) announced that starting from December 1, 2023, the process of listing new shares in the stock market after an initial public offering (IPO) will happen faster. Currently, it takes about six working days for shares from an IPO to start trading (T+6). However, the new rule will shorten this to three working days (T+3). So, if a company launches an IPO in December or later, its shares will begin trading only three days after concluding the IPO.

SEBI also stated that starting from September 1, companies can choose whether or not to opt for this faster listing procedure. The new rule will require companies issuing shares to clearly mention in their IPO documents whether they will follow the T+3 timeline. We anticipate positive effects from this change. It will quickly free up funds locked in the IPO process for other purposes. This will benefit both investors and the companies selling shares, as it will lessen the effects of unexpected shifts in the stock market.

Interestingly, this change to a T+3 timeline for IPOs is happening less than a year after moving towards a T+1 trade settlement cycle for regular stock market transactions. SEBI is also working on allowing trades to be settled instantly in the future.

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