The Securities and Exchange Board of India (SEBI) has issued new guidelines to make the rights issue process faster and more investor-friendly. Under this new circular, companies must complete the rights issue within 23 working days, which will facilitate faster share allotment to investors.

What has changed in the new rules- According to the new circular issued by SEBI:- The process will be completed faster: It will be necessary for companies to complete the rights issue within 23 working days after approval by the board.

Shareholder approval: If a company is issuing CDI-convertible debt instruments, the timeline of the process will be adjusted due to the approval of shareholders. Timing of rights issue: Now the rights issue will be open for investors for a minimum of 7 days and a maximum of 30 days. Stock exchanges and depositories will have to prepare an automated validation system within 6 months, which will make the application process of investors more secure and transparent. What companies have to do- Companies will have to submit the documents related to the issue to SEBI through email. The payment process will be completed online through the SEBI portal. SEBI has directed the stock exchanges and depositories to convey this circular to the investors and create the necessary infrastructure for its successful implementation. When will the new rule be implemented- According to SEBI, these new rules will be effective from 7 April 2025 and will be applicable to all rights issues approved by the board after this date. Why did SEBI bring this new rule- SEBI aims to make the market more transparent and fast so that investors get shares faster and companies can easily raise capital. This will give more flexibility to companies and participation will also be easy for small investors. This new step of SEBI will further strengthen transparency and protection of investors' interests in the Indian stock market.