IPO Rules Tightened, Companies Will Have To Give More Information Than Before : SEBI

IPO companies will now have to disclose more information than ever before. The companies will have to provide the IPO price details based on past transactions and fundraising from the investor. Many such important decisions were taken in the meeting of the SEBI Board of Directors held on Friday.

Till now, it used to take ten days to get the payment of money after redemption from the asset management companies. This has now been reduced to three days. Similarly, the time for dividend payment has been reduced from 15 days to seven days.

SEBI chairperson Madhabi Puri Buch said, "Checks were issued when the old rules were framed. Today the payment system has become very advanced and excellent. Now investors also do not have to wait so long for their money.

In order to safeguard the interest of investors, it was decided on Friday to introduce a two-stage verification process for trading in mutual fund units. Its new draft will be implemented from April 1 next year.

SEBI has also approved changes in the methods of Offer for Sale (OFS). Sebi said that till now non-promoter shareholders in the OFS were required to sell at least 10 percent stake or shares worth Rs 25 crore. This requirement has now been done away with in the new rule.