Primary market stability

Sebi's decisions will improve investor confidence

The Securities and Exchange Board of India (Sebi) has made a number of changes to the primary market processes and to the regulations for preferential allotment. These changes broadly serve the purpose of transparency, and could reduce price volatility in newly listed issues. In addition, the regulator has introduced a new provision wherein the reappointment of directors (including managing directors), who fail to get elected, can now only be made with the prior approval of shareholders. One of the key changes in the primary market rules for capital issues is that firms launching an initial public offer (IPO) must either