But Sebis goal to reduce paperwork will not be achieved following Income Tax (I-T) Departments directive making it mandatory for every investor to attach a copy of his permanent account number (PAN) card with every application exceeding Rs 50,000.
Merchant banking sources said this move would, to an extent nullify Sebis effort to fasten the allotment process in IPOs. It is ridiculous to ask investors to attach a copy of their PAN card, they usually do while opening a demat account. Instead of reducing the paperwork, this move will increase the paperwork, investment banking sources said.
Kamlesh Gandhi, executive director at Centrum Finance, said: Instead of making things simpler, the new requirement has added work. It has increased the scope for delays.
Sebi sources expressed helplessness on the issue saying they cannot do anything on this as the directive comes from the I-T department.
S Subramaniam, co-head, investment banking, Enam Financial Consultants, said: With rising income levels, Sebi has taken a wise decision to increase the amount to Rs 1 lakh. The retail portion limit to 35% is expected to benefit retail investors as it will help them to garner more from the IPO. As far as increasing paperwork post-issue is concerned, it is for the intermediaries and the investor is least concerned.
Punjab National Bank (PNB), 3i Infotech and Allahabad Bank have already taken the advantage of the in-principle approval given by Sebi to raise the retail bidding portion limit from 25% to 35%.
The regulator has also allowed retail bidders in these IPOs to bid for an amount less than or equal to Rs 1 lakh per application. Hitherto, retail players could only invest a maximum of Rs 50,000 per application.