Analysis and Insights into the world of IPOs and investing in India

Sunday, August 19, 2012

SEBI IPO Reforms: e-IPOs

The Securities and Exchange Board of India (SEBI) has introduced a number of sweeping changes by way of reforms that promise to revive primary markets and boost investor interest. Here's an insight into e-IPOs


Currently, IPOs are marketed through merchant bankers or syndicate members. Applications can be made only through these syndicate members. An ASBA Investor can visit an ASBA Bank branch and deposit IPO application under the current system.

To enhance retail participation in IPOs, SEBI plans to introduce electronic IPOs by utilizing broker terminal networks. The idea under e-IPO is to enable every single terminal of every registered broker of BSE and NSE to be able to accept application.

“We are talking to the RBI and Indian Banks’ Association to make ASBA available in all bank branches under the core banking system,” U. K. Sinha, Chairman, SEBI has said. Moreover, Brokers will be remunerated by issuer companies for using this mode

If gone as planned, electronic IPOs or e-IPOs can prove to be a real boon particularly in terms of accessibility as it has the potential take IPOs even to smaller towns and cities - wherever a terminal exists. Plus, if ASBA is made compulsory for all branches, then it can further enhance the reach of IPOs since in such case, the investor will only have to walk in to the nearest bank branch and deposit his IPO application
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