India’s stock market regulator plans to cut the time taken for approving initial public offerings by half from about three months now and also ease the listing process.
“We have agreed in consultation with officers that initial comments will come in two weeks’ time and then final comments in a week,” Securities and Exchange Board of India Chairman Ajay Tyagi said on the sidelines of an investment banking summit in Mumbai. That compares with 30 days taken for initial observations and another 60 for the final nod now, given that companies submit required documents.
It’s a good move as cutting the time taken to launch an IPO will reduce the volatility period and help merchant bankers price them better, said Dharmesh Mehta, managing director and chief executive officer at Axis Capital Ltd.
SEBI is also looking to further reduce the time taken to list a company, Tyagi said. It takes six days to list on exchanges after the IPO closes.
So far this year, 33 companies have raised about Rs 66,000 crore from the primary markets, the highest on record. “Around 20,000 crore worth of IPOs are still remaining with us for final comments,” said Tyagi.
Probe Into WhatsApp Leak
The regulator will also probe the alleged leak of corporate earnings through the instant messaging platform WhatsApp. “We are taking this very seriously, because how come such messages about reputed listed companies are leaked very close to what actually comes in the financial results. We cannot really sit quietly on that,” said Tyagi.
SEBI and the exchanges are examining the trade details of over two dozen stocks, newswire PTI had reported earlier quoting officials who said these included several blue-chip companies.
The regulator is also considering seeking call data records of all the persons involved in circulating such key financial details and other price-sensitive information about publicly traded companies on social media groups before it’s made public.
SEBI has powers to seek the call data records, excluding the exact content of the communication, from telecom service providers. It will seek clarification from brokerages and listed firms if such individuals are found to be associated with them, Tyagi said.
(With inputs from PTI)