Informist, Monday, Oct 18, 2021
By Rajesh Gajra
The surge in equity indices in the recent months has seen immense interest from retail investors in the stock market. This has also sharply increased retail investments in initial public offerings.
The amount raised from equity IPOs in the first six months of the current financial year is close to what was raised during the whole of last year.
According to Securities and Exchange Board of India Chairman Ajay Tyagi, the funds raised through equity initial public offerings this financial year is likely to surpass the highest amount ever raised in any financial year during the last decade.
Clearly, the IPO frenzy of last year has not only continued but has become even more intense this year.
With some of the IPOs listing at 50-100% premium to their offer price, everyone wants a piece of the pie. This has given rise to a thriving grey market speculating on listing gains.
There are online platforms which review and recommend IPOs on expected listing premiums and provide advice on 'kostak', the price at which an IPO application is sold in the grey market before the final bidding status is available to investors.
Clearly, the grey market premium trading is for investors who want to speculate or can take risks. But this market is becoming attractive for retail investors because of the low chances of allotment in IPOs, which are oversubscribed multiple times.
So far there have been no reports of defaults in this market. But the capital market regulator must keep a watch.
Whether SEBI can regulate this market itself is a grey area. It is not clear whether trades in the IPO grey market are within the ambit of the securities laws as they are taking place outside the stock exchanges' settlement mechanisms.
SEBI must plug loopholes, if needed, and look into this thriving market before it is too late.
LATEST ANNOUNCEMENTS
* SEBI relaxes 3-year promoter lock-in for Equitas Small Finance Bank
* SEBI asks NCDEX not to launch new futures contracts of mustard seed
* SEBI paper proposes halting misuse of book built price bands in IPOs
* SEBI board approves introduction of silver ETFs
ORDERS, ADJUDICATION PROCEEDINGS
* SEBI examining Invesco's role in proposing RIL-Zee deal (BL)
* SEBI penalises Aditya Birla Money 10 mln rupees for breach of norms
* SEBI warns Ruchi Soya as Ramdev says co FPO a mantra to be crorepati
* SEBI fines Videocon's Dhoot, others 7.5 mln rupee for insider trading
REGULATIONS (Announced in the past three months)
* SEBI bars pooling of MF funds by intermediaries, bourses from Apr 1
* SEBI extends deadline for complying with investment adviser guideline
* SEBI allows alternative fund investors to co-invest via portfolio management route
* SEBI relaxes certain norms for superior voting rights shares
DATA FROM SEBI
| Date | Unit | Latest | Previous | |
| FII/FPI net equity investment | Oct 13 | US$ mln | 166.44 | 33.82 |
| FII/FPI net debt investment | Oct 13 | US$ mln | 8.46 | (-)12.56 |
| DIIs net equity investment# | Oct 12 | bln rupees | (-)4.21 | 5.09 |
| DIIs net debt investment# | Oct 12 | bln rupees | 21.21 | (-)0.06 |
IPO/FPO/NFO
* GPT files draft papers with SEBI for share sale (Mint)
* SJS Enterprises gets SEBI nod for 8-bln-rupee IPO
* Radiant Cash Mgmt Services files draft papers with SEBI
SEBI IN NEWS
* SEBI streamlines issuance of SCORES info for firms listing securities (Mint)
* No SEBI order for cancellation of ratings licence, Brickwork clarifies
* Clearing companies to ask SEBI to defer T+1 settlement (ET)
* SEBI may insist on open offers in BPCL deal (PTI)
Sources - Television, Print, or Web Editions of: PTI--Press Trust of India, BS--Business Standard, ET--The Economic Times, Moneycontrol, CNBC TV-18, Mint, BL--The Hindu Business Line, TH--The Hindu, RTR—Reuters, BT--Business Today, IANS--Indo-Asian News Service, IE— The Indian Express, ToI--The Times of India, BB-Bloomberg Quint
Internet links: http://www.sebi.gov.in
#--Data not available for Oct 13
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Compiled by Pooja Sawant
Edited by Vandana Hingorani
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