SEBI's New Listing Day Rules for IPOs

Alchemist · #1 22nd January 2012, 12:04 PM

In order to curb market manipulation and speculation, SEBI has changed rules for newly-listed and re-listed stocks.

For IPOs up to Rs 250 crore in size:

- There will be a 1 hour call auction (9 AM to 10 AM).
- A price band of 5% will be applicable (5% from the equilibrium price).
- The stocks will trade in "Trade for Trade" segment for 10 days.

If no equilibrium price is discovered, the issue price will be used to calculate the price bands.

For IPOs greater than Rs 250 crore in size:

- There will be a 1 hour call auction (9 AM to 10 AM).
- A price band of 20% will be applicable (20% from the equilibrium price).

If no equilibrium price is discovered, the issue price will be used to calculate the price bands.

For re-listings:

- There will be a 1 hour call auction (9 AM to 10 AM).
- A price band of 5% will be applicable (5% from the equilibrium price).
- The stocks will trade in "Trade for Trade" segment for 10 days.

If no equilibrium price is discovered, normal trading will not commence and the stock will continue to trade in call auction sessions.

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Call auction details:

9:00 AM to 9:45 AM - Order entry and cancellation.
9:45 AM to 9:55 AM - Order matching.
9:55 AM to 10:00 AM - Buffer period.

Quote:

7. The above provisions shall be implemented within four weeks from the date of
issuance of this circular.

Relevant SEBI circulars:

http://www.sebi.gov.in/cms/sebi_data...7052881196.pdf

http://www.sebi.gov.in/cms/sebi_data...7052990613.pdf

ashish_jain11 · #2 22nd January 2012, 04:16 PM

Good one.

This is really appreciable.

Specially for "IPOs up to Rs 250 crore".

When the stock will be in T2T, only those interested in delivery will trade, that will reduce speculation.

And 5% band is very reasonable.

San Yad · #3 22nd January 2012, 06:21 PM

Quote:

Originally Posted by ashish_jain11

Good one.

This is really appreciable.

Specially for "IPOs up to Rs 250 crore".

When the stock will be in T2T, only those interested in delivery will trade, that will reduce speculation.

And 5% band is very reasonable.

I think over Rs. 250 IPO also should be same like this.

In my opinion, SEBI still left loop hole.

Happy Investing !

Prudent_Investor · #4 22nd January 2012, 08:14 PM

Quote:

Originally Posted by San Yad

I think over Rs. 250 IPO also should be same like this.

In my opinion, SEBI still left loop hole.

Happy Investing !

True, even a 251 crore IPO will be able to avoid T2T and move to a 20% price band, which makes room for manipulation.

However, this is broadly a investor friendly move and will save hard earned money of thousands of retail investors from the grasp of operators.