SEBIs New Norms for IPOs.

I gained meaningful insights reading the cover story published on investing in new age economy companies. Can you shed some light on the tightened IPO rules that SEBI has imposed?

- Milind K

Editor Responds: Thank you for your words of appreciation on the cover story published in the previous issue. With more and more new-age technology companies looking to raise capital fromprimary markets via initial public offerings (IPOs), SEBI has tightened rules for IPOs. The market regulator has put a cap on the usage of the issue proceeds for unidentified future acquisitions and restricted the number of shares that can be offered by significant shareholders. It has also extended anchor investors’ lock-in period to 90 days and the funds reserved for general corporate purposes by companies will be monitored by credit rating agencies. Further, the allocation methodology for non-institutional investors (NIIs) has also been revised. Under the new rules for offer for sale (OFS), shareholders with more than 20 per cent stake in the company before the IPO will not be allowed to sell more than 50 per cent of their shares. We hope we have answered your query. Keep writing to us!