Street Signs: Breaking with tradition, easier demat account closures, more

Tossing the script: Sebi breaks the mould with a new playbook

The Securities and Exchange Board of India (Sebi) is breaking its quarterly tradition of hosting a press conference after its board meeting. Typically, the chairperson uses this platform to explain the reasoning behind key decisions and address other questions. However, sources indicate that this time, Sebi will skip the press conference following its Monday meeting, where significant decisions are expected, including a new trading framework for the derivatives segment, Mutual Fund-Lite regulations, the introduction of a new asset class, and some adjustments to insider trading rules. This departure from tradition comes amid the ‘conflict of interest’ controversy surrounding Sebi Chairperson Madhabi Puri Buch, sparked by Congress and US short-seller Hindenburg Research. Since then, Puri Buch has attended public events but has maintained a distance from the media.

New listings spark a market firestorm of enthusiasm

Two initial public offerings (IPOs) that closed last week made it to the top 10 most subscribed mainboard issues in history. Vehicle loan company Manba Finance’s IPO garnered 224 times subscription, while that of air conditioner component maker KRN Heat Exchanger & Refrigeration (KRN Heat Exchangers) was subscribed 213 times. Only seven other IPOs have achieved subscription rates over 210x. While enthusiasm runs high, past trends suggest that after-listing performance may not sustain. Historically, initial euphoria often gives way to declining stock returns and plateauing performance. Grey market premiums indicate that Manba Finance may list with 30 per cent gains, while KRN Heat Exchangers may list with 120 per cent gains. Time will tell if these IPOs defy historical trends and sustain their momentum.

Sebi swings open the exit door for demat freedom

The Securities and Exchange Board of India (Sebi) has taken a significant step to make exiting the market easier for investors. It has relaxed the rules for closing dematerialised (demat) accounts, allowing clients to do so online without providing any reasons. This move aims to prevent ‘Abhimanyus’ — participants stuck in the market with no exit strategy. “Clients shall be entitled to close the demat account through online mode without mandatorily giving any reasons to the depository participant,” states the latest guidelines from the National Securities Depository, firmed up after suggestions from the brokers’ industry standards forum and Sebi. Furthermore, online closure will be available regardless of whether clients opened their accounts offline or online.