'Regulator should not intervene': Sebi chief Madhabi Puri Buch speaks on crowding of IPOs

Securities and Exchange Board of India (Sebi) Chairperson Madhabi Puri Buch on Saturday said that the regulator will not intervene in the IPO process but would keep a natural check and balance in the market. Earlier this week, Sebi had expressed concerns about the number of initial public offerings (IPOs) hitting the market. It had asked investment bankers to be wary of the stress it could put on the infrastructure for intermediaries, particularly IPO registrars, Hindu Business Line reported.

This week, IPOs from five companies – Tata Technologies, IREDA, Gandhar Oil Refinery, Flair Writing Industries and Fedbank Financial Services opened for subscription. These firms are looking to mop up a whopping amount of Rs 7,000 crore.

The regulator had issued a similar alert over the bunching up of public share sales in March 2021 and had asked intermediaries to ensure there were no system glitches while processing applications.

Reacting on the same issue, Buch said: "Regulator should not intervene because we might be taking away from opportunity. but there is a natural check and balance in the market, investment bankers make that assessment checking if there is a crowding in the market."

She added: "As far as the capacity for institutions to handle this load, we have not faced this problem... during T+3, we had done stress testing (for intermediaries and infrastructure institutions)... at the end of the day market forces operate."

In August this year, Sebi halved the timeline for listing of shares on stock exchanges after the closure of IPOs to three days from six days previously. The regulator had said the reduction in timelines for listing and trading of shares would benefit both issuers and investors.

Issuers will have faster access to the capital raised thereby enhancing the ease of doing business and the investors will have the opportunity to have early credit and liquidity for their investment. 

Sebi said the Registrar to an Issue would undertake third-party verification of the applications by matching the PAN available in the demat account with the PAN available in the bank account of the applicant, the regulator said.

Speaking about delisting norms, Buch on Saturday said the Sebi board has asked for more data and consultation on delisting norms.

"Very happy to report that the commitment for using data for policy making is (so strong) that since the number of delisting applications even over five years is small, the data is very limited to draw significant conclusions (is limited) Board has asked us to go back and do some consultation because the data set was limited," Buch said.

The regulator released a consultation paper on reviewing the voluntary delisting norms on August 14.

On November 16, Buch said: “There was a popular belief that we will never review the delisting norms and that we will always stay with the reverse book-building process, as many of you know we floated a consultation paper and we have got a lot of feedback and at the next Board meeting we are taking that proposal to our Board.” 

Also read: Tata Tech finalises offer price at Rs 500 per share for Rs 3,042-crore IPO

Also read: Flair Writing IPO subscribed 14.9 times on Day 3 so far; issue closes today