Telecom regulator Securities Exchange Board of India
(SEBI) plans to notify new norms to sell shares through electronic Initial
Public Offers (e-IPOs).
e-IPOs will help in fast-track the public offer
process and lower costs, besides allowing investors to apply for shares and buy
them at a click on computers without the need for signature on bulky physical
documents.
The move, aimed to revitalize the primary market was
also taken to tighten rules to find manipulators with tougher norms being finalized
for insider trading.
Currently, applications for IPOs can be uploaded on
a real-time basis only through ASBA (application supported by blocked amount),
only self-certified syndicate banks are authorized to manage and offer ASBA,
which allows application money to stay in an investor's bank account until the
shares are allotted.
The board of Sebi had already approved the proposal
to use secondary market infrastructure for public issuance called e-IPOs and
revamping insider trading norms to prevent the menace.
The Securities and Exchange Board of India (Sebi), will
soon notify regulations for selling shares through e-IPO, sources said. This will faciliate more retail investors in IPOs
and the issuance process is likely to undergo a sea change, resulting in
reduction in timelines, they added.
At present, the time taken for a company to get
listed after initial share sale is around 12 days. Sebi may reduce the post
issue timelines from T+12 days (12 days from issue closure to listing and
trading) to T+6 days.
Once the process gets stabilised, timelines could be
further curtailed to T+2/3 days, the sources said. Besides, only six main-board IPOs came to the
market. The entire year saw just one follow-on offer. This was by state-run
Engineers India Ltd (EIL), which also happens to be the biggest public offer
with an issue size of Rs 495 crore.
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