Market regulator the Securities and Exchange Board of India (Sebi) has cut down by nearly half the listing time for companies to 12 days after completing the initial public offer (IPO). The new rule would be effective from May 1.
The move would help rotation of investors' money faster for possible deployment in other issues.
"In its continuing endeavour to make the existing public issue process more efficient, the Sebi proposes to reduce the time between public issue closure and listing to 12 days from existing of up to 22 days," the market watchdog said in a circular.
The rule would be applicable to public issues opening on or after May 1, 2010, it added.
Also, the Application Supported by Blocked Amount (ASBA) facility would also undergo certain modification for achieving consistency with the reduced timelines.
With effect from January 1, Sebi had extended the ASBA facility to corporate investors and high networth individuals (HNIs) to enable them to apply for IPOs or rights issue by keeping the application money in their bank accounts till allotment. Earlier, the facility was available to retail investors only.
The circular also said that "the lead managers or their agents would be responsible for the accuracy of data entry and for resolving investor grievances".
"The move will help investors save interest cost on the fund borrowed for investing in IPOs and get back their their money faster. This will increase transparency in primary market operations," SMC Capitals Equity Head Jagannadham Thunuguntla said.
