The capital markets regulator Sebi on Tuesday voiced concern over the slow pace of primary issues, despite a good market condition, and asked investment bankers to do more "diligence" on the pricing front to get investors in. Chairman Ajay Tyagi said Sebi has given the go-ahead to initial public offers (IPOs) worth over Rs 60,000 crore in 2018, but many of them are yet to hit the street. Till October end, 24 companies raised Rs 30,959 crore through IPOs but most this been in the March quarter.

Last year was the best in terms of IPO fund raising, as the IPO market jumped to an all-time record of Rs 67,147.4 crore in fresh fund raising by over 120 companies, according to data from Prime Database.

When asked if the issue is pricing, he asked i-bankers to do more "diligence" while setting a price that will be acceptable to both the issuers as well as investors.

"Merchant bankers have a role to see that an issue is reasonably priced and which is acceptable to both issuers and investors," Tyagi said.

The Sebi chief seemed to suggest that domestic market conditions are better as compared to global peers, with firm macroeconomic fundamentals and said the rupee fall has also been arrested.

The market regulator SEBI has said that the company issuing IPOs must announce the price band of the issue at least five working days before the issue opens

Currently, the price band could be announced two working days before the IPO opened. This often left very less time in the hands of investor to analyse and arrive at an informed decision. The move by SEBI is aimed at enabling the investor to take an informed call on whether the price is fair and improve the quality of investor decision making

The price band is the price range within which the company will offer the shares under the IPO. Under the regulations, the spread or the difference between the floor and the cap of the price band cannot be more than 20%. In other words, it means that the cap should not be more than 120% of the floor price

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.

The Securities Exchange Board of India (SEBI) had earlier announced a list of reforms aimed at boosting primary market, the mutual fund industry and retail participation in the market. Of all the items on the agenda, the market regulator has not yet approved the issue of a safety net for retail participants in an IPO.

Under a safety net mechanism, certain portion of the investment made by retail shareholders could be guaranteed for a fixed period against market volatility. This concept was introduced to encourage more retail participation on initial public offers, especially at a time when investment sentiment is low in the country.

As per the proposed mechanism, a certain portion of the investment made by retail shareholders in the IPOs could be guaranteed for a fixed period, which could of six months, even if the shares' value plunge below the IPO allotment price during this time.

 This 'safety net' mechanism is being considered only for the small retail investors, who would be compensated by the promoters and other entities selling shares through IPOs in the event of the company's shares plunging below a certain threshold limit within six months of listing or the time frame set by Sebi,


Chairman UK Sinha today said that this concept required more consultation, and has therefore invited the public to voice their views on the idea of a safety net.

Finance Minister P Chidambaram has said regulator SEBI is expected to announce fresh market reform measures next month

Expressing satisfaction over wide-ranging reforms announced by Securities and Exchange Board of India (Sebi) yesterday for mutual funds and other segments, Chidambaram said he has requested SEBI Chairman U K Sinha to look into a number of other suggestions for the benefit of investors.

'The examination by the Government and Sebi is likely to be completed in the next two weeks. I have requested Sebi Chairman to schedule another meeting of the (Sebi) Board in early September when some more decisions can be taken on the suggestions that are under examination,' he said.

The Finance Minister said the measures announced by SEBI yesterday 'will stimulate financial savings among households as well as give a fillip to the mutual fund industry. More and more households should be encouraged to save in financial instruments rather than in gold'.

In wide-ranging changes to its various regulations, SEBI made it easier and more cost effective to invest and raise funds through IPOs, while allowing the Mutual Funds ( MFs) flexibility in using their fund expense charges and proposing a national mutual fund policy.

Besides, SEBI has also made provisions for retail investors getting an assured minimum lot of shares in IPOs (Initial Public Offers) and asked the companies to announce their price band at least five days in advance of the issue