From close to listing: the T+3 timeline

When an IPO closes, the money is already blocked in the applicant’s bank account. The shares are not yet theirs. What happens in the three working days between that closing date and the day shares can be traded is a tightly scheduled sequence of checks, transfers, and approvals — compressed into a timeline that SEBI shortened from six working days to three in August 2023. ¹

The rule is called T+3. T is the issue closing date — the last day bids can be placed. T+1 is the first working day after that, T+2 the second, T+3 the third. If an IPO closes on a Monday with no market holidays in between, the shares start trading on Thursday. The T+3 timeline must be disclosed in the offer document. ¹

Day T+1: the basis of allotment and PAN verification

The first working day after the IPO closes is when the registrar and the stock exchange decide who gets shares.

The registrar — the firm appointed by the issuer to manage applications — runs every valid application through two checks. The first is a PAN match. For UPI applications, this third-party verification (matching the PAN on the application against the PAN linked to the bank account and the demat account) must be completed by 9:30 am on T+1; for non-UPI applications, by 1 pm. ¹ If the PANs do not match, the application is invalid — no shares, no matter how many lots were bid for. ¹

The second is the basis of allotment itself. In an oversubscribed issue, this is where the draw happens: the registrar works out how many shares each successful applicant gets, following the allocation rules for each category. The basis must be finalised before 6 pm on T+1. ¹

The stock exchange then reviews and approves that basis, before 9 pm on T+1. ¹ Once the exchange signs off, the allotment is locked: the registrar knows exactly who gets shares and who does not.

Activity on T+1	Deadline
PAN third-party verification — UPI applications	9:30 am
PAN third-party verification — non-UPI applications	1:00 pm
Finalisation of basis of allotment	6:00 pm
Stock exchange approval of basis	9:00 pm

Day T+2: money moves and shares credit

The second working day is when the money and the shares actually move.

By 9:30 am on T+2, the registrar initiates the fund-transfer instructions, and two things happen at once. For applicants who were allotted shares, the application amount is debited from their bank accounts — the blocked funds are finally taken; this must complete by 2 pm. For applicants who received no allotment, the blocked amount is released; this must complete by 4 pm. ¹

At the same time, the depository — NSDL or CDSL — credits the shares. The corporate action for crediting demat accounts is initiated before 2 pm and completed before 6 pm on T+2. ¹ By the end of the day, every allottee should see the shares in their demat account.

The issuer files the listing application with the stock exchanges, which issue a trading notice before 7:30 pm on T+2. The allotment advertisement — listing the basis of allotment and the number of applicants in each category — appears on the websites of the issuer, the registrar, and the exchanges before 9 pm on T+2. ¹

Day T+3: trading begins

Trading starts on T+3 — the first day investors can buy or sell the newly listed shares on the exchange. ¹ The allotment advertisement, published on websites on T+2, appears in newspapers on T+3, or at the latest T+4. ¹

By this point the process is complete: allottees hold shares and have had the amount debited; non-allottees have their funds back.

What if funds are not unblocked on time?

The unblocking deadlines are strict, and SEBI built a compensation mechanism for when they are missed. For an applicant who receives no allotment, the blocked amount must be unblocked by T+2. For a partial allotment — say a bid for three lots that received only one — the excess must be unblocked by the next working day after the basis is finalised, which (the basis being set on T+1) is T+2. ¹

If the bank or intermediary misses these deadlines, compensation to the investor is computed from the T+3 day onwards. ¹

Scenario	Unblocking deadline	Compensation counted from
No allotment	T+2	T+3
Partial allotment (excess amount)	T+2	T+3

The T+3 timeline is a compression of the earlier T+6 standard. The applicant’s money is blocked for fewer days, shares arrive faster, and the gap between applying and trading has shrunk from a full week to three working days. PAN checks on T+1, money and demat credit on T+2, trading on T+3 — that is now the rhythm of every Indian public issue.

Footnotes

1. SEBI Master Circular for ICDR, 11 November 2024, Chapter 11 and Annexure XXIII. sebi.gov.in. The T+3 timeline was introduced via SEBI circular SEBI/HO/CFD/TPD1/CIR/P/2023/140 dated 9 August 2023. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰ ↩¹¹ ↩¹² ↩¹³