The Securities and Exchange Board of India issued a circular granting a one-time relaxation regarding the validity of its observation letters under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. Normally, public issues must be opened within 12 or 18 months from the date of such observations. However, due to difficulties faced by issuers in accessing capital markets amid ongoing geopolitical tensions in the Middle East and subdued investor participation, several issuers have deferred or withdrawn issuance plans, risking expiry of observation letters and duplication of regulatory processes. Considering these challenges, SEBI has extended the validity of observation letters expiring between April 1, 2026 and September 30, 2026, up to September 30, 2026. This extension is subject to submission of an undertaking by the Lead Manager confirming compliance with Schedule XVI while filing updated offer documents. The circular is effective immediately.
Securities and Exchange Board of India
Circular No. HO/49/11/11(123)2026-CFD-RAC-DIL2/I/8760/2026 | Dated: April 07, 2026
To
All Registered Merchant Bankers
All Recognized Stock Exchanges
All entities who propose to list specified securities
Sir / Madam,
Subject: One-time relaxation with respect to validity of SEBI Observations
1. In terms of Regulations 44(1) and 59C of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations, 2018), a public issue may be opened within twelve months and eighteen months respectively from the date of issuance of observations by SEBI.
2. SEBI has received representation from the Industry body on difficulties faced by the issuers in mobilizing resources and accessing the capital market in the backdrop of ongoing geopolitical tensions in the Middle East. This has led to several issuers to defer, recalibrate or withdraw issuance plans leading to potential lapses in observation letter validity and duplication of regulatory processes
3. Considering the representation of the Industry Body, the prevailing uncertain market conditions due to ongoing geopolitical tensions and subdued investor participation, SEBI has decided to grant one time relaxation to extend validity of the SEBI Observations letters, expiring between April 1, 2026 – September 30, 2026 till September 30, 2026, subject to an undertaking from Lead Manager to the issue confirming compliance with Schedule XVI of the ICDR Regulations while submitting the updated offer document to the Board.
4. This circular shall come into force with immediate effect.
5. This Circular is issued in exercise of powers conferred under Section 11 and Section 11A of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
6. This Circular is available at www.sebi.gov.in under the link “Legal > Circulars”.
Yours sincerely,
Bhumika Kanojia
Deputy General Manager
Corporation Finance Department
Email: bhumikak@sebi.gov.in
