In a move to make the initial public offering (IPO) application process more user-friendly, the Securities and Exchange Board of India (Sebi) is looking to introduce a templated format for company filings. In an effort to reduce approval timelines, the market regulator plans to develop a standardized ‘fill-in-the-blanks' style document that lays out the key disclosures in a clear, structured manner.
According to Sebi Chairperson Madhabi Puri Buch, the new format aims to remove unnecessary complexity from the existing process. In her words, “Too much mystique has been created around the DRHP (draft red herring prospectus)”. The templated document will focus only on the most important information needed by investors to make an informed decision. Any deviations would require a separate explanation.
This ‘demystified IPO document' is expected to streamline processing at Sebi as well. With objective disclosures and consistent formatting, the regulator hopes to evaluate applications faster. Puri Buch expressed confidence that approval timelines could be shortened significantly compared to current turnaround times.
The simplified filing mechanism will provide welcome relief to new companies seeking public listings. With clear guidelines on disclosures and an intuitive layout, the process of preparing and submitting IPO applications should become less daunting. By making the system more transparent and user-friendly, Sebi aims to encourage greater participation in the capital markets.
In addition, Sebi is working on incorporating artificial intelligence into its review procedures. This will allow applications to be analyzed in an automated, time-efficient manner while maintaining regulatory standards. Going forward, the goal is to approve more issuances when market conditions are conducive to capital raising.
