SEBI may allow investors to retain IPO subscription till allotment
08 Apr 2008
Mumbai: The Securities and Exchange Board of India (SEBI) proposes to reduce the time between sale and listing of shares by allowing investors to hold subscription amounts for initial public offers (IPO) in their bank accounts until allotment of shares.
Speaking at a seminar on IPO organised by Ernst & Young, C B Bhave, chairman of the regulator, said there was no reason why an investor's money should leave his bank account when he was not assured about allotment of shares.
"It is our belief that with the present technology available it is possible to earmark the amount in the investor account itself and not have the money actually transferred," Bhave said, adding, SEBI hopes to take a decision in the next three months.
"For this we need to talk to different players involved to see that it is operationalised initially on a voluntary basis and so keep both options open and slowly push it," he added.
Bhave had last month said the board would review the IPO process to reduce the time between the sale and listing and make it more efficient.
While, currently, the actual allotment time takes about 21 days, he said, to start with, it would be a good target to bring it down to seven days.
He said the SEBI board would be meeting sometime by middle of this month.