SEBI mulls reducing rights issue listing time

Kolkata: After reducing time to list shares on the stock exchanges post-closure of initial public offerings (IPOs), markets regulator SEBI is aiming to cut down the time for listing of rights issue shares, an official said.

In September last year, the Securities and Exchange Board of India (SEBI) decided on reducing the time to list shares on the bourses after IPO to 3 days from the present 6. The SEBI directive is likely to come into effect from July this year. SEBI had cited mitigating external risks such as market volatility and uncertainty of financial markets as the reason behind the move.

"SEBI aims to reduce the listing of IPO shares to 3 days from 6 days now. It is supposed to be introduced for IPOs from July 2019 onwards. Now, the regulator is working on simplifying the rights issue process," Central Depository Services (India) Ltd (CDSL) VP (operations) Nitin Ambure told PTI. "I hope the number of days for listing the rights issue shares may come down to 8-10 days from about a month now. This may happen in phases, also depending on the regulator's final decision," he said.

Ambure was in the city to participate at a discussion on demat of unlisted shares at the Merchants' Chamber of Commerce here. The markets regulator has involved stakeholders such as depositories and transaction advisors in the rights issue listing simplification process, just like it engaged exchanges and depositories for IPO shares, he said.

From April onwards, Unified Payments Interface (UPI) will be introduced as an alternative payment option for retail investors and SEBI has already cleared a proposal on it. National Electronic Funds Transfer (NEFT) is also being tested.

Analysts said the new payment mechanisms will make Applications Supported by Blocked Amount (ASBA) mechanism less attractive to investors. ASBA was introduced by the regulator so an investor does not lose out interest component on the application money.

Earlier, the process of normal allotment of shares for IPOs took almost a month. Ambure said SEBI had granted relaxation for processing Demat Request Number from the current 15 days to 30 days in the wake of unusual surge in requests for dematerialisation in recent months. As of now, the transfer of shares in the demat form is mandatory.