Thursday, December 30, 2021

New Rules by SEBI for NII, Investors, Anchor Lock-in & More

he market regulator Securities Exchange Board of India - SEBI tightened norms for the IPO process in the meeting held on December 28. They introduced new rules for companies raising capital from the market, anchor investors and preferential allotments, and changes in IPO pricing norms.


After the announcement recently listed IPOs surged with higher volumes. The companies like Latent View Analytics, Data Patterns India, SJS Enterprises, Krsnaa Diagnostics, Windlas Biotech, CE Info Systems, Ami Organics, Medplus Health Services, Cartrade Tech, KIMS, Tega Industries, Tarsons Products, Anand Rathi Wealth and RateGain Travel Tech rose 3% to 10% in the day trade on December 29.

Check out SEBI's new norms below:

  • Anchor investors' 50% investment will be a lock-in for 90 days (earlier it was 30 days). Now the new lock-in period will be 50% for 30 days and 50% for 90 days.
  • The company investors who are holding over 20% stake can sell a max of 50% of their shares via offer for sale in the IPO.
  • 33% of IPO Allocations under NII category reserved for 2 Lakh to 10 Lakh Application Size. The remaining 66% will be reserved for more than ₹10 lakh investment.
  • Companies can only use 25% of the IPO proceeds for unidentified acquisitions in the DRHP.
  • SEBI has also tightened disclosures around IPO objectives

In 2021 over 60 companies are already listed on the primary market. These rules will help in controling the price volatility on the IPO trading debut. Let's see how Upcoming IPO will react against this.