Primary protection

Sebi proposes tighter rules for IPOs

The Securities and Exchange Board of India’s Primary Market Advisory Committee (PMAC) has released a new set of proposals relating to the initial public offering (IPO) framework for public consultation and comment. The PMAC wishes to tighten regulations pertaining to the stated purposes of the IPO, with a cap on raising funds for acquisition, and monitoring of funds raised for general corporate purposes (GCP). It also suggests a longer lock-in for pre-issue shareholders, and a cap on the offer for sale (OFS) component in an IPO. In principle, these proposals are well-intentioned. They should ensure stakeholders have more skin in