THE Securities and Exchange Board of India (Sebi)-appointed primary market advisory committee (PMAC), which met on Thursday, has recommended limiting the period for participation by qualified institutional buyers (QIBs) in the subscription process of an IPO.
Currently, the subscription process is anywhere between 3-5 days and QIBs can put in their bids till the last hour. The committee is said to have recommended cutting the timeline for QIB participation in the subscription process, down to 2 or 3 days, depending on how long the book is open. Thereafter, the issue would remain open only for the non-institutional bidders i.e. HNIs and retail. Internationally, books are built in a single day, only QIBs participate, allotments are made immediately, and the listing follows.
However, in India, as the book is also open for non-institutional investors — high net worth individuals/ retail — the process is longer. The shortening of the period, between the subscription closure of an issue and its listing, was also discussed at the PMAC meet People familiar with the development told ET that this development is important in the context of streamlining the whole gamut of capital raising process.
