IPO Price Discovery

Subject – Economy

Context – Ajay Tyagi: IPO price discovery not as ‘transparent’ as stock markets

Concept–

Securities and Exchange Board of India (Sebi) Chairman Ajay Tyagi on Thursday said the initial public offering (IPO) market price discovery is not as “transparent and efficient” as secondary market price discovery and urged retail investors to “focus” more on secondary market since there is greater disclosure for listed companies.
Sebi has introduced an optional T+1 trade settlement cycle for domestic investors from January 1. This was done in the interest of investors.
The transition from T+3 to T+2 took place in 2003. There is a need to reduce it further now as there has been significant reforms in the payments and banking system. Investors have the right to receive what they purchase as quickly as possible. T+1 settlement cycle is in the interest of all market participants.
Starting this month, Sebi has barred brokerages from allowing any additional intraday leverages for equity and derivatives trading.

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