Retail investors want market regulator SEBI to continue with the existing system of applying for initial public offering for three years along with the proposed e-IPO (electronic IPO).

SEBI has called for a meeting of 23 recognised associations on March 13 in Mumbai to ascertain their views and suggestions. In a bid to boost fund-raising from markets, the market regulator last month proposed e-IPO norms, where investors can bid for shares through Internet and eventually on mobiles, while already listed public sector undertakings will be provided a ‘fast-track’ route for share sales to meet the disinvestment targets.

Listing in 3 days The market regulator intends to reduce the timeline for listing shares on the exchange to three days from the IPO closing against 12 days now. The last date for sharing public comments on the proposal ended on January 30.

Speaking to BusinessLine , Shiv Kanodia, Secretary, Bharat Merchants’ Chamber, said scraping conventional IPO for an e-IPO at one go would be suicidal in a country where a (Bombay) High Court has to order electricity board to ensure power supply during exams.

Internet accessibility Moreover, Kanodia added, in the proposed e-IPO, the prospectus will be available only online and one needs a good Internet connection even to access the details. With an Internet penetration of just 20 per cent and issues over power supply in Tier-II and Tier-III cities, retail investors would be nudged out completely from the market, he said.

Shrinivas G Pandit, Secretary, Kolhapur Investors’ Association, said the cost for investors in e-IPO would go up as they have to open a new account with a broker in addition to demat account.

“Brokers are usually busy during market hours and would not devote sufficient interest to entertain retail bids, particularly from smaller cities. Instead of broad basing retail investors, the e-IPO would eliminate small investors completely from the market,” he said.

Related Topics
comment COMMENT NOW