SEBI IPO New Clearance Rule.now strict in giving approval to companies to bring IPO.
SEBI IPO New Rules: Market regulator SEBI (SEBI) is now strict in giving approval to companies to bring IPO. SEBI has taken this step after the investors’ money was drowned in the IPO of many new companies during the last few times. For this reason, IPO draft papers (IPO DRHP) of about 6 companies have been returned during the last two months.
Changes will have to be made in DRHP(draft red herring prospectus)
According to a news from the news agency PTI, the name of Oravel Stays is also included in the 06 companies whose draft papers have been returned by the market regulator. This company operates a hospitality chain named Oyo. SEBI has asked all the companies to file their draft red herring prospectus again. Companies have also been asked to make some changes in their DRHP.
Papers of these companies were returned
According to the news, companies whose DRHPs have been returned include Oravel Stages, Canada’s Fairfax Group-backed Go Digit General Insurance Ltd, domestic mobile company Lava International, B2B Payments & Names like service provider Paymate India, Fincare Small Finance Bank India and Integrated Services Company BVG India are included.
Preparation was to raise so much money
These companies had submitted their DRHPs to SEBI during September 2021 to May 2022. At the same time, SEBI has returned their pre-IPO papers from January to March 10 this year. These companies were preparing to raise a total amount of more than Rs 12,500 from the IPO.
This effect happened due to these reasons
In the year 2021, a tremendous boom was seen in the IPO market. Taking the help of the stock market rally, many companies came up with IPOs. However, later most of these disappointed investors, including many big names. After this, SEBI started delaying the approval of the IPO. Last year i.e. in 2022, SEBI took an average of 115 days to approve the DRHP of the IPO.
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