The new framework would come into pressure after 60 days, the Securities and Exchange Board of India (Sebi) stated.
The resolution has been taken after discussions with inventory exchanges and Sebi’s Secondary Market Advisory Committee (SMAC), based on a round.
To verify irregular motion in inventory costs, Sebi on Tuesday got here out with a new framework for fixing the value band for buying and selling in shares on the primary day of itemizing after an preliminary public providing.
The resolution has been taken after discussions with inventory exchanges and Sebi’s Secondary Market Advisory Committee (SMAC), based on a round.
For buying and selling on the primary day pursuant to Initial Public Offering (IPO) or re-listing, Sebi stated that decision public sale periods would proceed to be performed individually on particular person exchanges and orders could be matched by respective exchanges after computation of equilibrium worth.
In case the distinction within the equilibrium worth between exchanges in share phrases is greater than the relevant worth band for the scrip, a Common Equilibrium Price(CEP) could be computed by exchanges.
“The CEP could be the quantity weighted common of equilibrium costs on particular person exchanges as decided by the decision public sale,” the regulator stated.
Sebi said the exchanges would set this CEP in their trading systems and apply uniform price bands based on the CEP. Further, only unexecuted pending orders from call auction sessions would be carried forward to the normal market segment.
The move came after Sebi observed that call auction sessions are conducted on multiple stock exchanges and that the discovered price or equilibrium price following such sessions could be different on each exchange.
If the difference in these discovered prices is significant, there could be a situation wherein price bands on individual exchanges are far apart from each other, giving an incorrect picture of price band to investors.
The new framework would come into force after 60 days, the Securities and Exchange Board of India (Sebi) said.
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