The Securities and Exchange Board of India (SEBI) is considering a “when-listed” platform that will enable market participants to trade in companies that have completed their initial public offerings (IPO) but are yet to list on the bourses.
“Today, we are at T+3 from closure of the issue to listing, but even in those three days there is a lot of trading that happens. So, why not give investors the opportunity to do this in a proper, regulated way,” SEBI chair Madhabi Puri Buch said on Tuesday at an event held in Mumbai.
Any company is listed on the bourses within three days of the close of its IPO. Buying or selling of IPO shares that are allocated but are yet to be listed on the stock exchanges is currently done by way of an informal channel called the grey market.
This market is used to gauge the premium or discount at which a company could list. Introducing an exchange platform for trading such pre-listed shares may eliminate the need for such informal channels.
The regulator is also in the process of demystifying the IPO offer document.
“We are working on standardising the format for IPOs, with a provision for exceptional reporting. This will shorten the time to prepare and examine the document, making life easier for the bankers and the regulator,” said Buch.
