Sebi mulls e-IPO for paperless bidding
Market regulator Securities & Exchange Board of India (Sebi) is considering a proposal to allow the companies to sell shares through an all-electronic Initial Public Offer (e-IPO), wherein investors would be able to bid for shares electronically and without the need for signing any papers physically.
The proposed move would help in fast-tracking the IPO process and lower the costs, besides allowing the investors to apply for shares and buy them at a click on computers without the need for signature on bulky physical documents.
Sebi is currently awaiting a formal clearance from the Ministry of Corporate Affairs for the e-IPO process, although the ministry has already given a go-ahead informally.
In a status report submitted before its board during its last meeting on November 24, Sebi said: “Implementing e-IPO requires amendments to the Companies Act.”
The amendment would be required to dispense with the requirements of an investor to “agree in writing”, since no application form submission is envisaged in the e-IPO process, as the allotment will be in demat account. “MCA has held the view that in the case of subscription of the to be listed shares which is in demat form, it may not be necessary that an investor needs to “agree in writing”,” Sebi told its board.
Sebi also plans to do away with the requirement of attaching certain documents with the public offer filings by the companies. Sebi plans to do away with the requirement of attaching a copy of the agreement entered into between the issuer and the lead merchant bankers. Instead, the banker would be required to certify that they have entered into an agreement with the issuer.
