Merchant bankers get in a huddle to consider ways to expedite, simplify IPO process

The Association of Investment Bankers of India (AIBI), which is the sole representative body of registered merchant bankers in the country, held a roundtable to discuss and identify practices and processes that are crucial in expediting the overall capital formation process.  

More importantly, the officials deliberated on the overall mechanism of launching an initial public offering (IPO) with a focus on the issue process, timelines, and ways to simplify them while still meeting regulatory requirements.  

The aim of the discussions was to consider the role of investment bankers in the current primary market scenario that has seen a sudden spurt in the quantum of fund raising as August and September cumulatively saw more than 20 issues hitting the market.  

Further, the discussions also focussed on initiatives identified towards capacity building of merchant bankers, promoting investor awareness and achieving ease of doing business in capital formation. AIBI also plans to work on identifying desired practices and processes that are crucial in expediting the capital formation.  

AIBI will set up a system to support merchant bankers’ capacity development and ongoing learning, especially for the new entrants who have registered as merchant bankers. Additionally, the updated due diligence guide for merchant bankers will be soon released by the industry body.  

The roundtable discussions held at Maharashtra’s Alibaug were led by Anant Barua, former whole-time member of Securities and Exchange Board of India (Sebi); Prithvi Haldea, Founder-Chairman of Prime Database; and S Subramanian, former MD of Axis Capital; along with AIBI Chairman Mahavir Lunawat and the board members of the investment bankers’ body.  

“After a full day of discussions at the AIBI off-site roundtable, we have pinpointed particular areas for merchant bankers’ capacity building and continual learning, while also launching advocacy campaigns for financial literacy,” said Lunawat.  

“We are collaborating closely with Sebi on a multitude of initiatives, such as establishing a SCORES platform at AIBI to track investor complaints about merchant bankers. The goal is to increase transparency and boost investor confidence,” he added.  

Incidentally, Sebi recognises AIBI as a ‘Designated Body’ for monitoring investor grievances relating to merchant bankers and bankers to issue. AIBI is planning to launch soon a program for financial literacy through digital as well as physical modes.  

In a similar context, Haldea, who has been an Honorary Advisor to AIBI for over a decade, said that various trends and data points have been analysed that suggest the need for certain reforms in IPO documentation and processes, as also in the SME segment.   

“AIBI must also play a larger role in investor education and in enhancing due diligence standards via strategic measures that elevate the investor confidence along with the market sentiments,” he said.

Also Read: Jindal Steel shares rebound 60% from 52-week low; is Rs 810 target price in sight?