SEBI plans to issue guidelines for IPOs upto Rs 500 crore

The Securities and Exchange Board of India (SEBI) plans to make it mandatory for companies raising less than Rs 500 crore through an initial public offering (IPO) to appoint a monitoring agency for keeping track of the use of funds. The bankers to the issue usually act as the monitoring agency, and provide required information about how the money has been used by the company.

The market regulator also plans to reduce paperwork for foreign portfolio investors wanting to bring money into the country, and to allow systemically important non-banking finance companies (NBFCs) in the institutional category in public issues.

SEBI is also likely to discuss the matter of allowing options trading for commodities, unified licence for brokers, use of e-wallet for investments in mutual funds and instant withdrawal facility in mutual funds among other things. 

The market regulator’s decision to allow NBFCs to bid for an IPO through the institutional category is expected to broaden the investor base. Now, NBFCs bid through the non-retail portion i.e. shares reserved for high networth investors (HNIs). 

It will also put in place regulations for instant withdrawal facility in liquid mutual funds. The regulator may mandate fund houses to get prior approval from the asset management company board and trustee board before offering this facility to investors, and make appropriate disclosures in offer documents.