Market regulatory body SEBI has made it stricter than before by changing the rules for applying in IPO. SEBI has also issued a circular regarding this.
New Delhi. If you also invest money in IPAO then there is a big update for you. There has been a big change in the rules for investing money in IPO. It is necessary for investors investing in IPO to be aware of this new change.
What changed
Market regulatory body SEBI has made it stricter than before by changing the rules for applying in IPO. Now SEBI is going to ban the practice of showing more subscription in IPO. Now only those investors will be able to invest in any IPO who really want to invest money in the IPO and the required amount will be available in their account through the application. SEBI’s new rule is going to come into effect from September 1.
Must have money in account
While issuing a circular in this regard, SEBI said that, the application for IPO will be processed only when the funds required for it are available in the bank account of the investor. SEBI has said that stock exchanges will accept ASBA applications on their electronic book bidding platforms only after they come with a confirmation that the application money is blocked. This rule will be applicable to all types of investors.
SEBI was getting complaints continuously
Actually SEBI was getting frequent complaints related to IPO application. In fact, SEBI had come to know that many institutional investors and wealthy investors apply in IPOs only so that more subscription can be shown in the IPO, which will attract investors to the IPO. The purpose of these investors was not to invest money in the IPO.
In the recent IPO, many applications had to be canceled simply because there was no money in the applicant’s account. At present, the bidding application in the IPO is done in the Supported by Blocked Amount framework. With this, money is deducted from the account only after the shares are allotted to the investors, but till the share is not allotted, the money remains in the account but it is blocked.
