By ipomarket.in Editorial Team · Last reviewed: 2026-10-13
Disclaimer: This article is for informational purposes only and does not constitute investment advice. IPO investments are subject to market risks. Please read the offer document carefully and consult a SEBI-registered investment advisor before investing.
The Securities and Exchange Board of India (SEBI) has extended a temporary relaxation that gives companies more room to adjust the size of their public offers at the last minute. Via a communication dated October 12, 2026 to the Association of Investment Bankers of India, SEBI extended the relief until March 31, 2027. The measure had earlier been due to end on September 30, 2026.
For retail investors tracking the IPO pipeline, this is a procedural change rather than a market event. But it affects how flexibly issuers can resize their offers while markets stay choppy, so it is worth understanding what the rule actually permits and where its limits lie.
What the relaxation allows
SEBI first announced the relaxation on April 13, 2026. It lets a company increase or decrease its IPO size by up to 50% without refiling the draft red herring prospectus (DRHP), the detailed disclosure document that goes to SEBI before an offer can proceed.
Before this relief, any change in IPO size exceeding 20% required the issuer to refile the DRHP. Refiling is time-consuming and can push an offer back by weeks or months, which is awkward when market windows open and shut quickly. By widening the threshold to 50% on a temporary basis, SEBI gave companies the ability to recalibrate without restarting the paperwork.
If you are new to the DRHP and why it matters, our explainer on what a DRHP is and how to read it walks through the document section by section.
Why SEBI introduced it
The original April 2026 relaxation was issued in response to geopolitical tensions in West Asia and subdued investor sentiment. The idea was to let companies that had already filed their offer documents respond to shifting conditions, so that a weak patch in the market did not force them to either go ahead with a mispriced offer or scrap it and refile.
The extension to March 31, 2027 comes against the same backdrop of persistent market volatility and geopolitical uncertainty, which is why SEBI chose to keep the flexibility in place rather than let it lapse.
The conditions attached
This is not a free pass to change an offer at will. SEBI has built in guardrails:
- Core objective must stay unchanged. A company using the relaxation has to retain its core IPO objective and provide justification for revising the issue size. The reasons the company raised money for in the first place cannot quietly change.
- Lead managers must certify compliance. The book-running lead managers, the investment banks steering the issue, must certify that any issue size change complies with regulations.
- Disclosure through an addendum. Any change in IPO size under the relaxation must be disclosed to investors through an addendum to the offer document, so the revised numbers are on record before the offer proceeds.
These conditions mean the flexibility sits alongside the usual disclosure discipline rather than replacing it.
The timeline so far
- April 13, 2026 — SEBI announces the 50% relaxation, applicable to IPOs opening on or before September 30, 2026.
- September 30, 2026 — The original window ends. After this date, standard protocols resumed, meaning the 20% threshold for DRHP refiling applied again.
- October 12, 2026 — SEBI communicates the extension to the Association of Investment Bankers of India, pushing the relief out to March 31, 2027.
As of April 2, 2026, SEBI had reportedly approved 143 companies collectively seeking to raise ₹1,745 crore through IPOs, according to Kotak Neo. That pipeline is part of the reason the flexibility was seen as useful: a large queue of approved issuers can benefit from being able to size their offers to prevailing demand without fresh refiling.
What it means for investors
For an ordinary applicant, the mechanics of applying for an IPO do not change. What changes is that the final issue size you see at the time of the offer may differ from the figure in the original DRHP, within the 50% band, provided the company has disclosed the revision through an addendum and kept its stated use of funds intact.
The practical takeaway is to read the offer document that applies at the time of the issue, including any addendum, rather than relying only on earlier draft figures. If you want a refresher on how the offer process runs end to end, see our guide on how the IPO process works in India.
Because the core objective has to stay the same and the lead managers must certify compliance, the relaxation is aimed at timing and demand flexibility, not at letting companies redirect proceeds. That is a meaningful distinction for anyone assessing an offer.
FAQ
What did SEBI change on October 12, 2026?
SEBI extended the temporary relaxation that allows companies to increase or decrease their IPO size by up to 50% without refiling the DRHP. The relief, originally set to expire on September 30, 2026, now runs until March 31, 2027, per SEBI's communication to the Association of Investment Bankers of India.
What was the rule before this relaxation?
Before the April 2026 relaxation, any change in IPO size exceeding 20% required the company to refile the draft red herring prospectus. The relaxation widened that threshold to 50% on a temporary basis.
Can a company change what it uses the IPO money for?
No. Under the relaxation, a company must retain its core IPO objective and provide justification for revising the issue size. The flexibility applies to the size of the offer, not to a change in its stated purpose.
How will investors know if an IPO size has been revised?
Any change in IPO size under the relaxation must be disclosed through an addendum to the offer document. Investors should check the latest offer document and any addendum before the issue rather than relying on the original draft figures.
Did the relaxation lapse at any point?
Yes. The original window ended on September 30, 2026, after which standard SEBI protocols, including the 20% threshold for refiling, resumed. The October 12, 2026 extension restores the 50% flexibility through March 31, 2027.
Last reviewed: 2026-10-13