Cutting red tape, a new SEBI-mandated merger SOP pledges faster exchange approvals, a boost for sectors like electronics, where swift deal closures can unlock manufacturing and export growth.
India’s two stock exchanges, NSE and BSE, have introduced a new standard operating procedure (SOP) aimed to speed up the regulatory approval process for mergers and demergers.
Effective 1 August, the SOP promises a seven-working-day processing window for complete applications, a sharp cut from the current three to five month timeline.
Mandated by the Securities and Exchange Board of India (SEBI), the framework eliminates physical paperwork, requiring companies to file documents only through digital platforms, such as the NSE’s Electronic Application Processing System and the BSE’s Listing Centre.
Under the new rules, companies must submit their draft merger or demerger scheme within 15 days of board approval. Exchanges can issue no-objection certificates (NOCs) or observation letters to SEBI only if queries are satisfactorily addressed, with firms allowed just two chances to respond.
However, approvals from the National Company Law Tribunal (NCLT) remain mandatory, and this step is still time-consuming. Market experts note that while the SOP streamlines the exchange and SEBI stages, the lack of statutory deadlines for SEBI sign-offs could still prolong the process.
In a Mint report, Srivatsan of Emerald Law Offices noted that the first step of securing exchange and SEBI approval can still take three to five months. He also highlighted the absence of a redressal mechanism for technology failures, which could force companies to restart the process.
Another expert suggested allowing parallel NCLT filings, with firms committing to adopt SEBI’s amendments or withdraw applications if rejected. Lawyers have also warned that the rigid framework and tighter response timelines could increase rejection risks, especially for companies less prepared for digital-only submissions.
While the SOP brings predictability and could save months in ideal conditions, dealmakers say procedural bottlenecks and regulatory sequencing still leave India’s merger and demerger process far from seamless.
The move holds relevance for the electronics sector, which has seen a rise in consolidation as companies scale up for domestic manufacturing and export opportunities.
Earlier this year, Dixon Technologies acquired a majority stake in Ismartu India to expand its mobile and consumer electronics assembly capacity.
Industry analysts say faster approvals under the SOP could help such deals close quicker, enabling electronics firms to respond faster to supply chain shifts and government manufacturing incentives.
