The Hindu Business Line : New IPO norms

The SEBI decision to amend the allotment process in Initial Public Offerings to Qualified Institutional Buyers (QIBs) on proportionate basis as in the case of retail investors will put an end to the controversies aired by certain domestic mutual funds and financial institutions over the alleged preferred allotment to the FIIs.

The introduction of a mandatory 10 per cent margin for the QIBs while offering the bids may also bring in some discipline to the process.

The retail segment usually gets over-subscribed more than 50 times in many of the IPOs, resulting in a large number of applicants not being allotted shares. SEBI should consider this while making future reforms.

C. P. Velayudhan Nair

Kochi

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