Investment bankers should promote start-up listing: Sebi

Investment bankers should also participate in untapped segments such as Reits and municipal bonds: U K Sinha

The Securities and Exchange Board of India (Sebi) on Tuesday urged investment bankers to promote a listing platform for start-ups.

“Nowhere in the world is the regulator involved in road shows for promoting a platform,” said U K Sinha, chairman of Sebi, at an event organised by the Association of Investment Bankers in India.

He pointed out that even after six months of guidelines being finalised, not a single start-up has listed. Sebi had cleared alternate fund-raising platform for start-ups in June this year.

“Even the small and medium enterprises (SME) platform took time to take off,” said Sinha. Urging the investment banking community to take up the promotion and growth of start-ups, he said i-bankers should also participate in untapped segments such as real estate investment trusts, or Reits, and municipal bonds, given the smart cities being planned by the Centre.

According to him, the regulator is willing to take up any issues and iron out the impediments surrounding start-up listing platform. However, the regulator would urge them not to suggest incremental changes.

From the beginning of 2016, Sebi proposes to reduce the time between initial public offering (IPO) closing and listing to seven days from 13 days at present. The move is being implemented by making Applications Supported by Blocked Amounts (ASBA) compulsory for all investors. The problem is that ASBA, a system where money is blocked but stays in an investor’s account till allotment is made, is not available with all banks.

On this, Sinha said the regulator has taken up with the Reserve Bank of India and Indian Banks Association to train bankers on ASBA so that retail investors’ money is not blocked indefinitely by participating in IPOs.

Two latest IPOs – Alkem and Dr Lal PathLabs – saw about 70 per cent of non-ASBA retail applications. Sources said sectoral people had alerted Sebi a lot of retail investors might be left out if the new timeline was implemented due to lack of ASBA reach.

On the IPO market, Sinha said the total primary issues in FY15 were worth Rs 9,700 crore, but it is Rs 18,300 crore in the current financial year, out of which Rs 16,150 crore would come from sectors such as healthcare, education, hotel and restaurants, while there are no issues from banks and power companies, which have been traditionally active.

On the proposed exit options and convertible issues, Sinha expressed hope that comments from the public and other stakeholders would be in place soon so that Sebi could issue the final guidelines in a timely manner.

“Our intent is to implement these norms as early as possible,” said Sinha.