North India Statesman
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Pre-IPO Trading: If you are investing in IPO then there is good news for you. Soon you will be able to trade allotted shares even before listing. Market regulator Sebi is considering introducing a system where investors can sell shares in initial public offerings (IPOs) as soon as they are allotted. SEBI Chairperson Madhavi Puri Buch said that this is being done to stop gray market activities.
Portal will be launched
He also announced that the two top proxy advisory firms will launch a portal that will act as a repository for related party transactions and will be useful for stakeholders to assess performance parameters in the company.
Shares can be sold before listing
Let us tell you here that these days many IPOs have been oversubscribed and many times investors have made huge profits on the day of listing. This has given rise to gray market activities where shares can be sold based on pre-determined terms at the allotment stage.
Buch said at an event of the Association of Investment Bankers of India (AIBI) that we believe that if investors want to do so then why should they not be given this opportunity in a properly regulated manner? He told reporters that there is a view that whatever is going on in the gray market, we think it is not right. If you have received allotment and want to sell your shares, sell them in the organized market.
Currently there is a period of three days (T+3) between the closure of the IPO and the listing of shares, while the allotment is finalized less than two days after the IPO closes. The IPO deadline was reduced from T+6 to T+3 in December 2023.
