Sebi hurdle for distributor quota in HDFC Mutual Fund's Rs 35-billion IPO

Fund house may go for pre-IPO placement instead

The Securities and Exchange Board of India (Sebi) is unlikely to accept HDFC Mutual Fund’s plea to allow a special quota for its distributors in its proposed Rs 35-billion initial public offering (IPO). 

The country’s leading asset manager has requested the market regulator to allow it to reserve 720,000 shares—2.8 per cent of the 25.5 million shares to be offered in the IPO—for its “empaneled distribution partners.” 

While special carve-outs for employees and shareholders are common in IPOs, this is the first time a company is seeking special reservation for its business partners.

“Sebi is not in favour of allowing