Sebi may let cos get listed six days after 1st share sale
19 Nov 2014 11:26 PM GMT
Capital markets regulator Sebi is working on plans to reduce the time duration for a company to start trading on stock exchanges after initial public offer (IPO) to six days. At present, the time taken for a company to get listed after initial share sale is around 12 days. A proposal on it is expected to be discussed during Sebi's board meeting here on Wednesday, official sources said.
Sebi may reduce the post issue timelines from T+12 days (12 days from issue closure to listing and trading) to T+6 days, they added. Once the process gets stabilised, timelines could be further curtailed to T+2/3 days, the sources said.
Sebi had formed a group comprising of representatives from the stock exchanges, depositories and others to work on norms that would enable use of existing secondary market infrastructure for collection of IPO bids and application money; reduce the post issue timelines and help companies reach more retail investors. Among others, there is a proposal to enable investors to submit its applications to any registered stock broker or depository participant.
Investors may also have the option to submit Applications Supported by Blocked Amount (ASBA) to its bank. According to the proposal, making ASBA mechanism mandatory for retail investors has the potential to reduce the post issue timelines. Under ASBA mechanism, investors can bid for shares while the money remains in his/her bank account and gets debited only after allotment of the shares. Currently, 54 banks in India are providing ASBA facility to the investors.
Sebi may reduce the post issue timelines from T+12 days (12 days from issue closure to listing and trading) to T+6 days, they added. Once the process gets stabilised, timelines could be further curtailed to T+2/3 days, the sources said.
Sebi had formed a group comprising of representatives from the stock exchanges, depositories and others to work on norms that would enable use of existing secondary market infrastructure for collection of IPO bids and application money; reduce the post issue timelines and help companies reach more retail investors. Among others, there is a proposal to enable investors to submit its applications to any registered stock broker or depository participant.
Investors may also have the option to submit Applications Supported by Blocked Amount (ASBA) to its bank. According to the proposal, making ASBA mechanism mandatory for retail investors has the potential to reduce the post issue timelines. Under ASBA mechanism, investors can bid for shares while the money remains in his/her bank account and gets debited only after allotment of the shares. Currently, 54 banks in India are providing ASBA facility to the investors.
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