Flexible DRHP rules could ease the compliance burden and help companies navigate volatile markets.
Sebi, bankers weigh relaxed IPO refiling norm
The Securities and Exchange Board of India and the Association of Investment Bankers of India are examining a proposal to relax the trigger that forces IPO-bound companies to file a fresh draft red herring prospectus when their issue size changes. Two people familiar with the discussions said AIBI has represented to Sebi that the current 20% threshold for fresh fund raises be raised to 50%, bringing it on par with offer-for-sale issuances. The matter was taken up with the regulator roughly a fortnight to three weeks ago, though no final decision has been taken. Sebi and AIBI did not respond to queries.
The current framework requires a company to refile its DRHP if the fresh issue size moves by more than 20%, a limit the regulator temporarily relaxed to 50% in April amid market volatility and subdued sentiment. That relaxation, which carries safeguards such as an unchanged main object of the issue and certification by lead managers, has been extended until March 2027. AIBI wants this flexibility embedded in the permanent regulatory framework instead of leaving issuers dependent on a temporary measure.
Why the threshold matters
For companies planning to tap the primary market, the refiling requirement carries significant time and cost. Valuations, pricing and investor appetite can shift between the filing of offer documents and the launch of an IPO, and a narrow 20% window can compel issuers to restart documentation and scrutiny. Recent examples include Oravel Stays, which cut its planned fresh issue to ₹3,350 crore from ₹6,650 crore through an addendum filed on 26 October, Hero Motors, which trimmed its issue to ₹1,000 crore from ₹1,200 crore in August, and Fractal Analytics, which reduced its IPO size by over 40% in February.
Market context and what to watch
The discussions come as primary market activity has been strong, with 104 issues raising a combined ₹1.55 trillion so far in 2026, against 63 issues worth ₹1.1…
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