To relief the investors from their locking money in Initial Public Offerings for a long time, the Security and Exchange Board of India is considering to introduce a new pattern of IPO process, which will reduce the waiting time-limit as well as blocked money, as per SEBI chief cited this on Tuesday in Mumbai.
Speaking at a seminar on IPOs organised by Ernst and Young in Mumbai, SEBI Chairman C B Bhave on April 09 said that there was no reason why an investor's money should leave his bank account when he is not assured about allotment of shares.
“What do you do with this money for 21 days….. We need to take what is required,” said Bhave.
The Primary Markets Advisory Committee (PMAC) of the market regulator is seeking the process of reducing waiting time and excess blocking money, as Bhave indicated.
SEBI has got several complaints so far regarding to change the way of IPO processing system. Responding over those complaints, SEBI wants to adopt that technology by which investors will able to pay only for allotted shares in spite of waiting for refund for unallotted shares.
The adopted technology would also reduce the actual allotment time from current 21-22 days to within seven days. Usually, from opening the ‘issue’ to listing in the bourses it takes 21 to 22 days.
The new technology of IPO processing system will work both physically and electronically, as informed Bhave to the seminar. “Banks can use Electronic Clearance System for paying the cost of allotted system,” said SEBI chief.
“SEBI board meeting will be held sometime by middle of this month,” said Bhave and then the final decision will be taken. It will take three months in taking decision in this regard, as said Bhave.
“SEBI is talking to different people. Initially, it may be done on a voluntary basis.” he said.
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