SEBI Action

To contain IPO manipulations

Auction process to put merchant bankers on high alert at boutique banks

The Action

First Trading session to start with 45 min pre open for price discovery. The closing price from this session would be the opening price for regular trading in the morning session

Smaller IPOs i.e. all <250 Crs (or INR 2.5 bln), will on listing, trade in the Trade to Trade segment

Large IPOs with size > 250 Crs ( INR 2.5 bln) will trade within upper and lower limits of +/- 20% thru the circuit breaker deployed for 100 scrips for 10 days 

Smaller IPOs i.e. <250 Crs (INR 2.5 bln) will trade within upper and lower limits of +/- 5% thru the circuit breaker for 10 days

According to new rules this week, SEBI has limited listed IPOs to the Trade to Trade segment which will allow orders against delivery only, not allowing trading of scrips and limiting the IPO market , FIs probably in agreement with SEBI ina  fee less market dominated bby vanishing fly by night operators in its last stages throughout H2 2010 and all of 2011

Thence the pre open session for price discovery(further..we speculate..) has lesser meaning but yet it encourages more effective price discovery in the new market which can later consider IPOs hopefully for regular trading instead of T2T segment to be reserved for indiscriminate promoters with a bland due diligence from vanishing trading houses

All seven promoters' issues hotlisted with merchant bankers last month had issue sizes of <250 Crs and were prenalised variously for the act of price manipulation.

 

Posted via email from The India Investment Post