Sebi working on reducing listing time to 4 days

In a bid to make primary markets more efficient, regulator Sebi is working towards cutting down the time taken for listing of companies on stock exchanges to four days from the current norm of six days.

Presently, it takes six days after the close of bidding in the initial public offer (IPO) for a company to list on stock exchanges, thus keeping the investors' funds locked in for a longer period of time.

Sebi Chairman U K Sinha said on Tuesday he had directed his team to begin working towards reducing the listing-gap to meet the global standards.

"We have been able to bring down the issue timing from T+12 to T+6 (T denotes the closing date of an IPO, while the number represents business days in listing equity shares on the bourse) days and I would like to say that all of us have to start working now about how to further reduce the issue timing," Sinha said at Ficci's capital market conference here.

"Can we bring it down to say T+4 days for example and reach the best global standards. I am sure we can do this with the cooperation of the markets, government and the RBI as well as the bankers. I have already asked my team to start working in that direction," he said.

Noting that retail investor participation in the primary markets has picked up significantly, Sinha said the current fiscal is expected to be the best in terms of IPO issuances.

"After a gap of several years we are today in a position to say that this financial year is going to be one of the best year so far as the financial markets are concerned. We have substantial amount of money being raised in the first half year...," Sinha said.

"One thing that strikes me is that in two out of the 15 (IPO) issues, the number of retail investors has crossed one million. This is in my opinion a remarkable development that after years retail investors are coming into the markets and exhibiting their confidence and faith," he noted.

Additionally, he said two issues have been oversubscribed by more than 80 times.

"This shows how much appetite people have to invest in the markets if we can bring in an issue with reasonable and affordable price," the Sebi chief added.

He also asked companies and investment bankers to exercise caution over disclosures and IPO pricing.

"Three years ago, more than 2/3rd of the issues were trading continuously below the issue price and retail investors had left the primary markets," Sinha said, adding that rigorous enforcement of disclosures, among others, have helped bring in a situation where more than 2/3rd of the issues now are trading above the issue price.

In the first quarter of 2016-17, 19 IPOs hit the market raising Rs 5,862 crore, says Sebi data.