Sebi fast-tracks primary market processes as IPO market picks up

 

Mumbai: As the primary market shows signs of stirring to life with mid-sized firms starting to raise capital via initial public offerings (IPOs), the capital market regulator is accelerating clearances of IPO applications, said two persons familiar with the development. The Securities and Exchange Board of India (Sebi) is trying to clear applications within 30 days of companies filing their IPO prospectuses, said the persons, both of whom spoke on condition of anonymity.

 Earlier, it would take more than 45 days—at times several months if there was a delay by the merchant bankers in replying to Sebi’s queries. “Whatever IPO application is being filed, Sebi is clearing it on a priority basis now. At the moment there may be only three-four applications that are awaiting approval, but even those applications are only a few weeks old,” said one of the two persons, who is aware of Sebi’s processes.

 Even in the case of applications on which Sebi has queries, bankers arranging share sales are being given a deadline within which those queries must be responded to, said a third person who is dealing with the regulator. 

Hitherto, no such deadlines have been specified, often leading to delays in the final approval of an IPO application, said the third person. Sebi’s attempt to fast-track clearances of IPO applications comes at a time when the primary market has started to revive after three years. Companies are seeking to capitalize on buoyant investor sentiment in the secondary market to raise funds to expand as the economy rebounds. Since the beginning of this year, the BSE Sensex has gained 27.27%, while foreign institutional investors have bought a net $14.15 billion from local equity markets. In fiscal 2011, nearly 52 firms raised Rs.33,097.77 crore from the primary markets; IPOs dried up in subsequent years and in the year ended 31 March 2014, only one issue worth Rs.919.14 crore was launched.

 While Sebi has cleared 10 IPO applications in the past one year, the number of companies looking to tap the primary markets is likely to increase this year in response to the buoyant secondary market, bankers sayAt present, three IPO applications are awaiting Sebi’s nod. Speedy clearances of IPO applications is among several steps taken by the capital market regulator to revive the primary market. In June, Sebi rationalized the minimum dilution requirement for IPOs. On 20 August, Mint reported that the capital markets regulator is planning to relax rules for publicly traded companies also to raise money through fast-track follow-on public offerings (FPOs) and rights issues. 

Prashant Sharma

PGDM- 2nd year

Mumbai: As the primary market shows signs of stirring to life with mid-sized firms starting to raise capital via initial public offerings (IPOs), the capital market regulator is accelerating clearances of IPO applications, said two persons familiar with the development. The Securities and Exchange Board of India (Sebi) is trying to clear applications within 30 days of companies filing their IPO prospectuses, said the persons, both of whom spoke on condition of anonymity. Earlier, it would take more than 45 days—at times several months if there was a delay by the merchant bankers in replying to Sebi’s queries. “Whatever IPO application is being filed, Sebi is clearing it on a priority basis now. At the moment there may be only three-four applications that are awaiting approval, but even those applications are only a few weeks old,” said one of the two persons, who is aware of Sebi’s processes. Even in the case of applications on which Sebi has queries, bankers arranging share sales are being given a deadline within which those queries must be responded to, said a third person who is dealing with the regulator. Hitherto, no such deadlines have been specified, often leading to delays in the final approval of an IPO application, said the third person. Sebi’s attempt to fast-track clearances of IPO applications comes at a time when the primary market has started to revive after three years. Companies are seeking to capitalize on buoyant investor sentiment in the secondary market to raise funds to expand as the economy rebounds. Since the beginning of this year, the BSE Sensex has gained 27.27%, while foreign institutional investors have bought a net $14.15 billion from local equity markets. In fiscal 2011, nearly 52 firms raised Rs.33,097.77 crore from the primary markets; IPOs dried up in subsequent years and in the year ended 31 March 2014, only one issue worth Rs.919.14 crore was launched. While Sebi has cleared 10 IPO applications in the past one year, the number of companies looking to tap the primary markets is likely to increase this year in response to the buoyant secondary market, bankers say. At present, three IPO applications are awaiting Sebi’s nod. Speedy clearances of IPO applications is among several steps taken by the capital market regulator to revive the primary market. In June, Sebi rationalized the minimum dilution requirement for IPOs. On 20 August, Mint reported that the capital markets regulator is planning to relax rules for publicly traded companies also to raise money through fast-track follow-on public offerings (FPOs) and rights issues.

Read more at: http://www.livemint.com/Money/Dg48JuMtiDoCOixIK5shyH/Sebi-fasttracks-primary-market-processes-as-IPO-market-pick.html?utm_source=copy

Mumbai: As the primary market shows signs of stirring to life with mid-sized firms starting to raise capital via initial public offerings (IPOs), the capital market regulator is accelerating clearances of IPO applications, said two persons familiar with the development. The Securities and Exchange Board of India (Sebi) is trying to clear applications within 30 days of companies filing their IPO prospectuses, said the persons, both of whom spoke on condition of anonymity. Earlier, it would take more than 45 days—at times several months if there was a delay by the merchant bankers in replying to Sebi’s queries. “Whatever IPO application is being filed, Sebi is clearing it on a priority basis now. At the moment there may be only three-four applications that are awaiting approval, but even those applications are only a few weeks old,” said one of the two persons, who is aware of Sebi’s processes. Even in the case of applications on which Sebi has queries, bankers arranging share sales are being given a deadline within which those queries must be responded to, said a third person who is dealing with the regulator. Hitherto, no such deadlines have been specified, often leading to delays in the final approval of an IPO application, said the third person. Sebi’s attempt to fast-track clearances of IPO applications comes at a time when the primary market has started to revive after three years. Companies are seeking to capitalize on buoyant investor sentiment in the secondary market to raise funds to expand as the economy rebounds. Since the beginning of this year, the BSE Sensex has gained 27.27%, while foreign institutional investors have bought a net $14.15 billion from local equity markets. In fiscal 2011, nearly 52 firms raised Rs.33,097.77 crore from the primary markets; IPOs dried up in subsequent years and in the year ended 31 March 2014, only one issue worth Rs.919.14 crore was launched. While Sebi has cleared 10 IPO applications in the past one year, the number of companies looking to tap the primary markets is likely to increase this year in response to the buoyant secondary market, bankers say. At present, three IPO applications are awaiting Sebi’s nod. Speedy clearances of IPO applications is among several steps taken by the capital market regulator to revive the primary market. In June, Sebi rationalized the minimum dilution requirement for IPOs. On 20 August, Mint reported that the capital markets regulator is planning to relax rules for publicly traded companies also to raise money through fast-track follow-on public offerings (FPOs) and rights issues.

Read more at: http://www.livemint.com/Money/Dg48JuMtiDoCOixIK5shyH/Sebi-fasttracks-primary-market-processes-as-IPO-market-pick.html?utm_source=copy