IPO Price Band Gap: After Zee Business initiative, SEBI to soon come out with policy to fix definitive gap between prices of Initial Public Offers

The Securities and Exchanges Board of India (SEBI) will soon come out with a policy wherein a definitive gap between a price band of an initial public offer (IPO) issue will be decided, Zee Business Assistant Editor Brajesh Kumar said in an exclusive report quoting sources.

Zee Business had launched a campaign pointing out that the difference between lower and upper price band of many companies' issues had been only Re 1/-. Like for example, IPOs of companies such as IRFC price band was Rs 25-26 per share, Stove Kraft was at Rs 384-385 apiece, and many others.

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The Assistant Editor explained that in such case, the price discovery of an issue becomes unfair and wouldn’t get appropriately decided due to the low gap between the price band.

In this regard, the SEBI has shown resentment towards merchant bankers who leads the issue of any company for IPO amid the low gap price band, says Kumar. 

ZEE BUSINESS EXCLUSIVE

IPO के प्राइस बैंड में पर्याप्त अंतर बनाए रखने पर जल्द आएगा SEBI का नियम, जी बिजनेस की एक्सक्लूसिव खबर...

ब्रजेश कुमार से समझिए पूरी खबर...#IPO #StockMarket #SEBI @AnilSinghvi_ @BrajeshKMZee pic.twitter.com/r5DgkjpdjI

— Zee Business (@ZeeBusiness) September 6, 2021

He adds, the regulator to soon come out with a policy, wherein a definite gap between price band would become mandatory to merchant bankers and the company's that launches IPO.

SBEI's primary market advisory meeting was held on Friday, wherein a specific committee has made recommendations related to the market regulator related to a price band matter, says Kumar.

Hence, the assistant editor believes by this month-end, a discussion paper regarding a price band matter would be out and proper rules will be laid out for both merchant bankers and companies. He expects within 2-3 months a policy would also be launched regarding the same.