Cos May Get To List Within 7 Days After IPO Closure

NEW DELHI: Market regulator SEBI is trying to reduce the time period between the closing of an initial public offer (IPO) and its listing on the exchanges.

The regulator is examining a proposal which will shrink the public offer process from current 20-22 days to 7 days. This would give considerable relief not only to investors interested in the stock, but also to companies.

The proposal currently under examination essentially entails cleaning up the public offer process and making it more transparent and efficient. Investors may not need to fill long elaborate forms while applying for shares of a company going in for listing.

Also, multiple data entry by banks and syndicate members lengthening the process will be streamlined. At present, for an IPO, data is entered by the broker, banker, merchant banker and registrars separately, complicating the whole process. Cheque clearing by banks also takes time.

If the process is shortened, the issuing company would be able to list on stock exchanges within seven days of the issue close, investors would be able to get their refunds earlier.

It would allow retail investors, who may not have funds to participate in many IPOs simultaneously, to participate in more IPOs, as application monies would be refunded quickly in the case of non-allotment or under allotment.

The government had asked Sebi take a relook at the IPO allotment process following its misuse. A special committee under the regulator which is examining the IPO process has looked into all the details and has made these recommendations. These suggestions are aimed at infusing efficiency levels achieved in the secondary markets into the primary market.

A final call on the proposed changes will be taken by the Sebi board. The first report of the securities market infrastructure leveraging expert task force had in 2004 also made similar recommendations after which certain changes were made.