The group to review issue processes (GRIP) has recommended elimination of application forms in the primary market. The sub-panel of primary market advisory committee (PMAC), a standing committee of the Securities and Exchange Board of India (Sebi), has also suggested there should be no manual intervention in the issue process of the primary market.
The GRIP panel has suggested that the entire initial public offering (IPO) process can be carried out through the Internet platform. Another option is to use the secondary market infrastructure already available to the market, GRIP said in its report to be submitted to the PMAC on Monday.
A highly placed source in the GRIP told FE, ?Till now, whatever has been done for speeding up the process in the primary market was just patchwork here and there and not concrete measures. What we have suggested would bring the primary market settlement process on a clean slate and make it more efficient.?
PMAC is expected to discuss the GRIP report in Mumbai on Monday and recommend to the Sebi board its views on cutting the number of days in the IPO process from the closure of the IPO to the listing. The Sebi-formed PMAC is a standing panel, with a mandate to suggest to the regulator any reform required for the primary market.
The Sebi board, at its meeting in New Delhi last week, had given its in-principle approval for cutting the listing time taken by IPOs after issue closures. It now takes at least three weeks for an IPO, from its date of closure, to list in the secondary market. This long gestation period is perceived to be the genesis of many problems being faced by the regulator and investors.
One major menace is the grey or unofficial markets for new issues, which can be curbed effectively if the time lag between the issue closure and listing is shortened, feel market observers.
GRIP was formed to suggest ways and means to the capital market regulator for cutting the time required between the closure of an IPO and its listing.
GRIP comprises experts from the all segments of the capital market, including merchant banking, representatives from legal firms, investor associations and rating agencies.