More disclosure now required from companies launching IPOs - full details here

Companies launching their Initail Public Offering (IPO) are now required to disclose the average price being spent by large investors to buy shares of that company. offered to large investors per share.

This is being done for investors to know how expensive one share of a particular issue is being offered in comparison to the average price per share being offered to large investors.

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In the recently concluded public issues, private equity funds and other large investors have sold shares at premium prices.

On 17, November, Zee Business had reported that these rules will be implemented soon and now they have been implemented.

Share Sale (IPO) in IPO will now require higher disclosures from the company bringing an IPO.

It has become mandatory now to disclose weighted average cost of acquisition 

It is mandatory now to disclose the weighted average cost of acquisition against the offer price 

In IPO advertisements, the IPO issuing company will have to declare the weighted average cost under ‘Risks to Investors’.    

Market Regulator Securities and Exchange Board of India (SEBI) has written to AIBI, which is an association of investment bankers.

The investors will now know how expensive it is for retail invesstors i.e. weighted average cost versus the offer price

The rules have been implement with effect from 20 November. The direction has been issued for RHP (Red Herring Prospectus) filed before the Registrar of Companies (RoC) under the Ministry of Corporate Affairs (MCA).

Zee Business had reported about the implementaion of these rules on 17 November.