Jan 21, 2025 06:05 PM IST
India’s securities market regulator is exploring measures to allow trading of IPO entitlements before listing to reduce black market activities
India’s securities market regulator is considering steps to formalize trading in initial public offerings where bidding has closed, but the shares are yet to be listed.
The Securities and Exchange Board of India may allow investors who get allotment, to trade the entitlement of those shares prior to the listing, according to Madhabi Puri Buch, chairperson.
Also read: Groww’s parent company Billionbrains Garage Ventures eyes ₹6,500 crore IPO this year: Report
Through this mechanism, SEBI wants to curb the “black market”, where such shares are traded unofficially ahead of their official debut, Buch told reporters in Mumbai.
While such a facility may help reduce unregulated trading in IPO shares for a certain period, it does not impact the unofficial market that comes alive as soon as a company files for going public.
The potential rule changes come at a time when India has emerged as one of the busiest destinations for first-time share sales in the world, with more than 300 companies raising over $20 billion last year.
While India’s stock benchmarks have corrected since peaking in September, it has not dampened investor enthusiasm for new listings in the South Asian nation.
Also read: Mind the Gap: Why American companies are wrong to roll back DEI policies.
Last year, the regulator proposed changes in regulation for listing of tiny companies after several dubious transactions came to light. SEBI has also sought public opinion for an overhaul of rules for merchant bankers.
Recommended Topics
