The Capital market regulator Sebi came out with the exciting amendment in lock in period rules. this is often a welcome move of Sebi at perfect time for the businesses looking to list on the stock market .
The markets regulator has made it easier for companies to launch initial public offers (IPOs). Also it are often presumed that the Sebi has undertaken the varied measures to spice up up the economy slowdown thanks to pandemic.
Generally, during lock-in period promoters & investors cannot liquidate the pre-IPO securities held by them. Hence, investors weren’t ready to unlock the worth of their funds by liquidating on the stock market for the longer period. To ease out this issue, now Sebi has reduced the lock in period for the promoters and every one the categories of investors.
Further, just in case the bulk of the difficulty proceeds excluding the portion of offer purchasable (OFS) is proposed to be utilized for cost , then the promoter pre – IPO shareholding lock-in period shall be 3 years from the date of allotment within the IPO.
This proposal also will be welcomed by issuer companies which are already funded by Alternative Investment Fund (AIF) of Category I or II or a far off risk capital Investor (FVCI), private equity firms who earlier weren’t having the exit or liquidation option before one year. Now they need choice to liquidate their holdings after six months from the date of their acquisition.
PayTM, Policybazaar, Nykaa, Mobikwik are arising with their IPOs on the right time as their existing investors will now have the chance to urge liquidated with this exit route after 6 months from the date of allotment to public within the IPO. Sebi has resolved regulatory hurdles, provide investment flexibility and streamline regulatory processes within the interest of all categories of Investors.
In last 3 months, stock exchange is experiencing record subscriptions on the rear of influx of investors.
The current phase of security market is additionally attracting the retail Investors and their participation within the IPOs as compared to previous couple of years.