Capital markets regulator Sebi is working on plans to reduce the time duration for a company to start trading on stock exchanges after initial public offer (IPO) to six days.
At present, the time taken for a company to get listed after initial share sale is around 12 days.
A proposal on it is expected to be discussed during Sebi's board meeting here tomorrow, official sources said.
Sebi may reduce the post issue timelines from T+12 days (12 days from issue closure to listing and trading) to T+6 days, they added.
Once the process gets stabilised, timelines could be further curtailed to T+2/3 days, the sources said.
Sebi had formed a group comprising of representatives from the stock exchanges, depositories and others to work on norms that would enable use of existing secondary market infrastructure for collection of IPO bids and application money; reduce the post issue timelines and help companies reach more retail investors.
Among others, there is a proposal to enable investors to submit its applications to any registered stock broker or depository participant.
Investors may also have the option to submit Applications Supported by Blocked Amount (ASBA) to its bank.
According to the proposal, making ASBA mechanism mandatory for retail investors has the potential to reduce the post issue timelines.
Under ASBA mechanism, investors can bid for shares while the money remains in his/her bank account and gets debited only after allotment of the shares. Currently, 54 banks in India are providing ASBA facility to the investors.
Moreover, it has been proposed that the current arbitration process, settlement guarantee fund and investor protection fund available for secondary market trading be extended for primary market transactions subject to certain conditions and modifications.
