SEBI plans to trim bidding period for QIBs


SEBI plans to trim bidding period for QIBs
Mumbai: As per its new plans, the Securities and Exchange Board of India (SEBI) is to lessen the bidding period for qualified institutional buyers (QIBs) in both new and follow-on share offerings. According to an official, the move was among the proposals discussed by SEBI's Primary Market Advisory Committee, and a final decision is to be taken shortly, reports Reena Zachariah and Apurv Gupta of the Economics Times. Any public issue, whether initial public offering or follow-on public offering, has to be opened for at least three working days for subscription, according to the present rule. At their discretion, companies can keep it open for retail bids for an extra day. SEBI made it compulsory for institutional investors to pay their entire bid value upfront since May this year. Hence, all the institutional bids have been coming in on the last day of the issue as these players do not want to lock-in their money for two extra days. Because of this, retail investors have very little time to take a decision. Since a final decision is yet to be taken, it seems that SEBI may keep the QIB portion of the book open for one or two days. If the retail portion is kept open even for an extra day, it is possible for companies to cover up the bidding process in three days. "In case the book is closed earlier for institutional investors, assessing the demand and pricing of the issue becomes easier for retail investors. This also helps in easing the pressure arising from all the bids getting bunched up," said S Venkatraghavan, managing director, IDFC Capital. Adding to it, SEBI is also at making the IPO application form simpler. Companies making IPOs are likely to list their shares within seven days from the close of subscription by the end of this calendar. A shorter timeline between issue closure and listing of shares will be helpful reducing market risk for investors.