Sebi tweaks listing day price discovery process to ensure uniformity

While exchanges will continue to conduct call auctions separately, Sebi has mandated a series of measures to ensure equilibrium prices at both the exchanges are close to each other

The Securities and Exchange Board of India (Sebi) on Tuesday issued fresh guidelines to ensure uniform price discovery for stocks at the time of listing or re-listing. 

At present, stock exchanges conduct an hour-long call auction session separately to arrive at an equilibrium price before trading starts on listing day. 

The equilibrium price helps curb volatility. However, at times there is huge variation between the equilibrium price discovered by NSE and BSE. 

Further, if the stock has a trading limit, the closing price also tends to be hugely divergent for some days. Wh­ile exchanges will continue to conduct call aucti­ons separately, Sebi has mandated a series of measures to ensure that equilibrium prices at both the exchanges are close to each other.