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Sebi frowns at low retail IPO demand

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Lukewarm retail participation in recent public floats of InterGlobe Aviation and Coffee Day Enterprises has caught the eye of the Securities and Exchange Board of India ( Sebi), the stock markets regulator. Retail investors are those who invest less than Rs.2 lakh each.
According to sources, it plans to ask investment bankers of the two transactions why this had happened.
The retail quotas in both were under- subscribed. The regulator is also likely to take up the issue at the annual conference of the Association of Investment Bankers in India (AIBI) next month. An e- mail to Sebi wasn’t answered.
“The regulator wants to know if the issues were marketed properly,” said a source.
Sources said Sebi will also raise other issues on primary markets at AIBI conference. Merchant bankers are likely to raise issue of the start- up listing platform. Theyre looking for clarity on how the proposed Institutional Trading Platform for start- ups will be different from the one available for small and medium enterprises.
“Retail investors saw the two IPOs as expensive. Not many expected the issues to make good gains,” said an investment banker.
"Institutional investors are market makers. The concern for retail investors is not around making returns but the safety of their investments.
There are safer options for them, such as mutual funds, to be part of the equity market," said Pranav Haldea, managing director, Prime Database.
Business Standard, New Delhi, 17th Nov. 2015

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