Quick listing of IPOs on cards

Listing of initial public offerings in seven days from the book closure of a public issue —- or T+7 in regulatory language —- is likely to become a reality soon.

The matter is likely to be taken up by the Securities and Exchange Board of India (Sebi) board when it meets later this month.

The primary market advisory committee of the regulator has made its final observations on the issue at a meeting on Friday.

“Seven is a good target to start with. We will work on reducing it further as we go ahead,” C B Bhave, Sebi chairman, said after speaking at an IPO conclave at the Bombay Stock Exchange on Tuesday.

He said the board will be meeting in the second or third week of April, but refused to divulge the agenda for the meet.

Prithvi Haldea, member of the primary market panel, said, “This is one of the earliest reforms that you will see in the capital markets. Bhave is very focused on that.”

Haldea observed that it is important because the 21-day gap between the subscription and listing of IPO allows the certain sections of the intermediaries are taking unfair advantage of it.

“A lot of people are making money due to the inefficiency in the system. This move will address that.” Haldea was referring to the huge float —- or the days that investment bankers and promoters get to keep the money without paying any interest on the subscription money.

An investor who has applied for shares in an IPO by putting in money has no idea if he would get an allotment till about three weeks after the closing date. This is the ‘float’ period.

Sources said often there are informal “profit sharing agreements” on how to share this booty between the promoters and bankers