To protect the interests of small investors, preparation of strictness on companies that bring IPO

SEBI IPO Rules: The regulator of the stock market, SEBI (SEBI) is going to make major changes in the rules of listing of IPO. According to the proposal of SEBI, how companies spend the money raised through IPO and how quickly big investors exit after selling the shares after listing, strict will be done so that the interests of small investors can be taken care of. After the listing of the IPO, SEBI has also proposed to increase the lock-in period for Anchor Investors to sell shares.

SEBI has proposed and sought suggestions from stakeholders on this. The last date for making suggestions is till 30th November. SEBI has brought this proposal when new IPOs are coming in the market one after the other.

The proposals on which SEBI has sought suggestions from people are as follows:

The amount raised from the IPO will have to be spent on inorganic growth initiatives and other expenses of the company.

The money that the technology company raises is spent on entering new markets, creating new customers and acquiring other companies. This creates volatility on the investments of the investors.

Shareholders of companies that do not have a designated promoter in the IPO cannot sell more than 50 per cent stake. An investor who has more than 20 percent holding in the company will be considered as the major shareholder.

On such shareholders, their shares will remain in the lock-in period for six months after the IPO. So that they cannot sell their stake. These rules venture capital funds,
Will be applicable on alternate investment funds.

In any IPO, 50 percent anchor investors will be called those who will not sell shares for 90 days. At present, this rule is only for 30 days.

The proposal to make these rules from SEBI has come when the Reserve Bank has increased the investment limit to Rs 1 crore by taking loans in the listing of new shares from April 1.

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