Shrinking price bands may trigger Sebi rule on keeping minimum 5% gap

The Securities and Exchange Board of India (Sebi) might soon mandate IPOs to have a minimum difference of 5 per cent between the upper and lower end of the price band. The move is to facilitate the so-called book building process used for price discovery during IPOs. Currently, the regulator prescribes a maximum range of 20 per cent. But in absence of a minimum threshold often the difference between the upper and lower end is a few percentage points, which according to Sebi, is diluting a fair and transparent price discovery. The regulator has data to back this claim. About