The ticker at Sebi Bhavan

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: it spills over to the secondary market, post-listing.

Alongside this problem, another issue which has once again come to the fore in the context of recent IPOs is the aspect of aggressive—read unduly high—pricing of IPOs. Yes, issuers can argue in some cases that if the pricing was unnecessarily high, the issues would not have been oversold multiple number of times, but the problem of pricing remains an issue. This is certainly not to suggest a return to the days of regulated pricing of issues, but there is a case for more disclosures in terms of how the pricing of an issue can be justified by the issuer and the merchant bankers. One hears of enough cases of issuers nudging merchant bankers to raise the price of IPOs.

While Sebi has reiterated time and again that pricing cannot be its responsibility, better disclosure in pricing could certainly arm investors with sufficient information not to burn their fingers. If investor protection is Sebi’s primary job, this qualifies as an important part of it.

The cost of intermediation is another area which Sebi seems to have focused on, and the reduction of fees for filing of offer documents of issues and mutual funds is a step in the right direction. Costs and access for investors will come down. Eventually, such measures will increase retail participation in the capital market.