The Government has said that the IPO price is fixed by the issuer based on an analysis of the quantitative and qualitative factors of the Issuer Company, market sentiments, and demand for the scrip as assessed during road shows etc. The freedom to fix the price band rests with the issuer, who generally does so in consultation with the merchant banker.
Giving this information in written reply to a question in the Lok Sabha today, the Minister for Corporate Affairs, Shri Salman Khurshid said that as per the data received from Bombay Stock Exchange (BSE), on an analysis of IPOs listed during the period April 01, 2009 till April 30, 2010, as many as 24 out of the 39 IPOs listed during the period have closed above the issue price on the date of listing.
Further 23 IPOs out of the 39 IPOs listed during the period are quoting above their issue price as on April 30, 2010.
The Minister also informed the House that an expert group was appointed to study and suggest steps for monitoring the end use of IPOs funds. The report of the Expert Group is under examination by the Ministry ofCorporate Affairs.
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