For companies raising funds through IPOs in the Indian stock market, it is not always easy to adjust their plans to changing market conditions. Market volatility, changing investor interest and funding needs often force companies to alter the size of their IPOs. However, regulatory requirements can make such changes time-consuming.
Keeping this challenge in view, market regulator SEBI has allowed changes in the fresh issue size of IPOs.
Let us understand SEBI’s decision in detail and see how it could affect companies launching IPOs, the primary market and investors.
What’s Happening?
SEBI has decided to extend the existing relief for changes in the fresh issue size of IPOs until 31 March 2027. The regulator conveyed this information in an email sent to the Association of Investment Bankers of India (AIBI) on 12 October 2026. Earlier, this relief was available until 30 September 2026. Under this provision, companies could increase or decrease the size of their IPO’s fresh issue by up to 50% without filing a fresh draft offer document.
Under the normal rules, a change of more than 20% in the issue size required companies to file new draft documents. However, in April 2026, SEBI granted temporary relief in view of tensions in West Asia and market uncertainty. This facility has now been extended to IPOs that open for subscription on or before 31 March 2027.
Why Was Relief Given to Companies?
Ongoing tensions in West Asia and stock market volatility have affected companies’ fund-raising plans. In such an environment, changes in investor demand may require companies to reassess the size of their IPOs.
Earlier, the requirement to file new documents for significant changes could delay the process. As a result, companies had to complete additional regulatory formalities.
The Association of Investment Bankers of India (AIBI) had raised practical concerns about this process with SEBI. According to the association, the relief will help companies adjust their fund-raising plans to changing business needs and market conditions. This will allow them to determine the size of the fresh issue based on market demand. However, the relief applies only to the fresh issue, through which a company raises capital by issuing new shares.
Which Conditions Must Be Followed Under the New Rules?
While SEBI has allowed companies to change the issue size, it has also laid down certain conditions to maintain transparency. The most important condition is that the main objective of the IPO must remain unchanged. Companies can increase or decrease the size of the fresh issue, but they cannot change the purpose for which the funds were intended to be raised.
In addition, companies will have to provide a valid reason for the change. Book Running Lead Managers (BRLMs) will have to certify that the changes comply with the applicable regulatory rules. The lead manager will also have to update the Draft Red Herring Prospectus (DRHP) to reflect the revised issue size. Details of all necessary changes will have to be made public through an addendum. The aim is to give companies greater flexibility while ensuring that investors receive accurate and updated information.
What Does This Mean for Investors?
The relief from SEBI will allow companies launching IPOs to adjust their plans more easily according to market conditions and funding needs. This could make the fund-raising process in the primary market more flexible. The primary market saw strong activity in September 2026. During this period, more than 34 companies raised approximately Rs 39,380 crore, accounting for nearly 42% of the total funds raised up to September in financial year 2026–27.
Meanwhile, by the end of September in FY27, a total of 78 companies had raised approximately Rs 94,276 crore. These figures reflect the continued activity in the IPO market.
For investors, an important point to note is that companies will still have to disclose the reasons for changing the fresh issue size and provide revised documents. This will help investors better assess the company’s funding needs and the purpose of the IPO.
What’s Next?
SEBI’s decision could give companies launching IPOs greater flexibility amid changing market conditions. Companies that need to revise their fresh issue size in response to investor demand or business requirements could benefit the most.
However, this relief is not permanent. For now, it applies to IPOs opening for subscription until 31 March 2027, and companies will still have to meet all applicable disclosure requirements and regulatory conditions.
Going forward, the impact of this decision will depend on how effectively companies use the facility. If it helps reduce procedural delays, raising capital could become easier. At the same time, transparency and access to accurate information will remain equally important for investors.
Disclaimer: This article is for educational and informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. The companies mentioned are cited as examples within the context of market developments. Investors are advised to conduct their own due diligence and consult their financial advisor before making any investment decisions.
Investments in the securities market are subject to market risks. Read all related documents carefully before investing.
