SEBI has planned to change the structure of large size IPOs. The regulator made a resolution on 31 July about this. It also includes a proposal to increase the allocation limit for institutional investors and reduce allocation limit for retail investors. The regulator has made this plan amidst increasing activities related to IPO. SEBI has found that where the average IPO is increasing, the same retail participation has been stable for the last three years.
Participation of retail investors is not increasing in big IPOs
Sebi According to, there is no increase in retail participation in especially in large size IPOs. Regulator has published a consultation paper on its website about this. It states that more than Rs 5,000 crore amount IPO The limit of allocation for retail investors can be reduced to 25 percent. Right now this limit is 35 percent. On the other hand, the allocation limit for institutional buyers can be increased to 60 percent. Right now this limit is 50 percent. This change will be applied in a phased manner.
Plan to increase the number of anchor investors
SEBI has also proposed to increase the fixed number of anchor investors. This will increase the participation of large foreign portfolio investors who manage many funds in IPO. Apart from this, apart from mutual funds, insurance companies and pension funds can also be included in the Reserve category for anchor investors. Reservation of insurance companies, pension funds and domestic mutual funds in anchor investor category can be increased from 30 per cent to 40 per cent. One third of this will be reserved for mutual funds. 7 percent will be for insurance companies and pension funds.
Opinion can be given on SEBI’s proposal by August 21
This proposal of SEBI can be given opinion by August 21. It is important to keep in mind that SEBI has just moved the proposal and has sought the opinion of the people associated with the issue. SEBI will consider them after receiving opinion on the proposal. Then, it will present the final rules and regulations about this. SEBI has the responsibility of fixing terms and conditions for the secondary market and primary market.