IPO rules may get a tweak

After putting in place measures for checking stock volatility on the day of listing, the Securities and Exchange Board of India (Sebi) is to shortly issue rules modifying the initial public offering process.

A senior Sebi official told Business Standard the regulator would complete the last leg of the three-stage initial public offering (IPO) reform process as quickly as possible. The aim is to cut the listing time and enhance retail participation.

The first stage, to streamline and institute deterrent measures to curb wrongdoing, started with action on previous cases of manipulation. The official said that with the announcement of measures on Friday to curb IPO manipulations on the listing day, the second stage of the strategy was over.

“The third stage is bringing in comprehensive changes in the whole IPO process. The committee set up for this purpose has already started consultations. The panel is looking at ways to reduce listing time for IPOs and steps to ensure participation of people from as many cities as possible,” he added.

He said the steps to curb volatility on the listing day would ensure a realistic price was reached within an hour. The regulator would then have a good reference level to take action and violators would have little window for manipulation.