DNA Money Edit: Maiden floats set for an easy sail

As several companies are waiting to raise funds from the primary market, the stock market regulator has eased the initial public offer (IPO) rules. The Securities and Exchange Board of India (Sebi) cut the time for the announcement of price band for IPOs from five days to two. The reduction in the time period will help issuers budget for volatility in domestic and global markets. Sebi has also relaxed the requirement of financial disclosures to three years from five years earlier.

The changes to the Issue of Capital and Disclosure Requirements (ICDR) Regulations mean that several archaic disclosure requirements will now be a thing of past. Surely, they will help companies make more meaningful disclosures in their offer documents and, in turn, help investors make an informed decision. The disclosures in the offer documents which are a tedious and a cumbersome process will become much simpler. The changes will ease the long-drawn process to raise funds from the public.

The rules could not have come at a better time as two dozen companies have lined up IPO plans worth Rs 25,000 crore, largely to fund their expansion projects and working capital needs. The market is only hoping that these changes are implemented quickly as companies are at various stages of hitting the market.