New Delhi: Market regulator SEBI will review the IPO procedure with a view to reduce the time gap between opening of an issue and its listing on the bourses.
The measures, according to SEBI sources, are aimed at creating a level-playing field between retail investors and institutional investors.
Sources said it would be the endeavour of SEBI to reduce the time period to three days and ask institutional investors to make upfront payment for subscribing to public issues, as is the case with retail investors.
This would also help in curbing excess over-subscription by institutional investors, they said. SEBI will take a final view on the issue based on the recommendations of Primary Market Advisory Committee, which is likely to meet on March 10, sources added.
Meanwhile, SEBI Chairman CB Bhave briefing reporters about Wednesday's board meeting said the primary market issuance process would be reviewed to reduce the gap between the opening
of an issue and listing of its shares.
Answering questions whether the committee would also look into the grey market for IPO, he said once the gap is reduced, grey market would disappear.
Bhave said there is a feeling that the things are not same for retail and institutional categories of investors in the IPO process.
"Institutional investors tend to argue that they put in lot of money that cannot be locked in for such a long time. Secondly, some people have raised the issue of funds that remain with the banks. That issue will also be automatically addressed once we reduce the gap," he said.
He said settlement period in secondary market has been cut from 42 days to T+2 (2 days after the trading). "There is a feeling similar reforms should happen in the primary market." To a query, SEBI whole-time member T C Nair said 200 FIIs have registered between October 15 and now.
Bhave said new FII registration process would be made more flexible. "We want to make it more flexible. We are taking more time so that more FIIs can easily get registered. We are expecting to notify it anytime now," he said.
Meanwhile, the board has decided to appoint a committee to look into the role of NSDL in the IPO scam, after Bhave requested to be recused from the inquiry as he was Chairman of the depository when the proceedings started.
The panel will be headed by Bhopal-based National Judicial Academy Director Mohan Gopal and include RBI Deputy Governor V Leeladhar and Corporate Affairs Secretary Anurag Goyal. The board will also seek the advice of Maharashtra Advocate General Ravi Kadam.
Earlier, Finance Minister P Chidambaram addressed the board members and emphasised the need for greater investor protection, according to Bhave. He said the Minister stressed the need to raise the base of genuine and long-term investors, particularly from non-metro cities.
The SEBI board also gave in-principle approval to an arrangement to allow Madras Stock Exchange members to trade on NSE platform.
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