SEBI boss likely to revamp IPO norms

First, he speeded up the process of revamping the takeover norms. Now, SEBI Chief UK Sinha wants to climb his next mountain-change the rules of the primary markets game, reports CNBC-TV18's Neha Arora.

Sinha says, "The IPO process or the primary market fund raising process is very old so far as SEBI is concerned. We have decided we are going to have a complete review of the IPO process. We have set up a group. The group has started working. Anybody who has any suggestions is most welcome to give. The idea is to make fund raising more efficient by way of cost and time."
As part of the revamp, Sinha will ensure that the intermediaries -- the book running lead managers -- play a greater role to ensure adherence to timelines, and hence quicker IPO clearances.
"When we analysed we found if the market is not good if you want to delay the thing you don't respond to SEBI's queries so for months together SEBI's queries is not replied and since it is not replied the ball is in SEBI's court. We are going to change the rule of the game we are going to make it obligatory that the response to the sebi query is to be given in a particular timeframe and iof it is not given the case will be closed by SEBI," he adds.
Sinha's plans have leading bankers sitting up with excitement. They say the new norms will make for a new era in the IPO market.
Uday Kotak, Vice Chairman, Kotak Mahindra Bank says, "The prospective changes in the IPO process I would certainly welcome it - anything that improves the efficiency of the markets and makes the market more fair to investors is positive."
Sinha says the new rules will also make for an environment where intermediaries can demand information from the corporate house planning to raise funds through IPOs. In addition, SEBI is working feverishly to launch a single-point Know-Your-Customer information gathering system, that will empower intermediaries and make for smoother IPOs. Also watch the accompanying video.