SEBI's Bhave again calls for quicker IPO listing
19 November 2009
The Securities and Exchange Board of India has reiterated that companies going public should be enabled to get their shares listed within seven days after closing the initial public offering (IPO) subscription process.
''The listing time should come down to seven days,'' SEBI chairman C B Bhave said at a securities conference in Mumbai, yesterday. Among other things, this could lower the risks and costs associated with the current gestation period of about 20 days.
Bhave said the 20-day period was ''unacceptable'' in today's market. He has made similar statements earlier, as the country's apex market regulator seeks to limit the frenzied speculation in the grey market that precedes every new listing.
Bhave said several changes take place betweem the time an IPO closes and the shares are listed, and due to this, investors get exposed to potential risks for a longer period. A shorter gestation period would unlock money invested in IPOs faster, so that it can be productively employed, he added.
The SEBI chief also asked for lower costs and risks associated with mutual fund investments. ''We need to look at reducing the cost of mutual funds and risk for investors,'' Bhave said. ''We believe the primary issuance process in India is not as efficient as the secondary market.''
Bhave had said in August that SEBI was looking to bring down the allotment period in an IPO to five days from two weeks at present if the new system of payment for public issues that was seen during the NHPC issue gains popularity. (See: SEBI mulls shortening IPO process at PMAC meeting)