IPO slowdown worries SEBI

Our Bureau | | Updated on: Dec 18, 2018

S lowdown in the primary market for IPOs is worrying SEBI Chairman Ajay Tyagi. At a conference in Mumbai, Tyagi said they had given go-ahead to IPOs worth around ₹60,000 crore but very few are attempting to list.

Tyagi cautioned investment bankers at the event about IPO pricing and advised them to be more careful in volatile times. Fund-raising by small- and medium-sized companies have doubled compared to last year, Tyagi added. Gains by key benchmark index Nifty stood at 3.4 per cent this year so far, while the same for the Sensex stood at 6.5 per cent. But the IPO market went into doldrums due to tight liquidity situation.

Muralidhar Rao, Executive Director, SEBI, who spoke at a separate event of CII in Mumbai, advised asset management companies to strengthen their in-house credit risk assessment system on fixed income products and cautioned them from relying completely on rating agencies.

Assets managed by funds in India are at a record level and on a strong growth trajectory but still in a nascent stage compared to other global markets, Rao said.

“Mutual funds have fared exceedingly well in the past and they play a critical role in bringing stability, efficiency, and transparency into the financial system. Looking at the global scenario and considering the benefits of side-pocketing, we have decided to allow MFs to create a segregated portfolio, with respect to debt and money market instruments, subject to various safeguards. This facility would be available to MFs based on the credit events at the issuer level,” Rao said.

A CII Report titled ‘India asset management — Coming of age’ was released by Rao and other fund managers at the event.

Published on December 18, 2018
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