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In light of the prevailing uncertain market conditions due to ongoing geopolitical tensions and in order to enable issuers to mobilise resources and access the capital markets, SEBI has by way of a Circular No. HO/49/11/11(123)2026-CFD-RAC-DIL2/I/8760/2026, dated April 7, 2026 (‘Circular’), granted a one-time relaxation to extend the validity of SEBI observation letters issued for initial public offerings. The key aspects of the Circular are as follows:
- Existing Validity Framework: Under the ICDR Regulations, a public issue may be opened within twelve months and eighteen months, respectively, from the date of issuance of observations by SEBI.
- One-time Relaxation: SEBI has granted a one-time relaxation to extend the validity of SEBI observation letters that are expiring between April 1, 2026, and September 30, 2026, such that their validity will stand extended till September 30, 2026. This relaxation is subject to an undertaking from the lead manager(s) to the issue confirming compliance with Schedule XVI of the ICDR Regulations while submitting the updated offer document to SEBI.
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