Zerodha founder Nitin Kamath, in his recent Twitter post, explained that the online stock brokerage firm Pre-IPO Proposal. Market regulator SEBI’s ICDR rules define a subscription period for an IPO during which it has to be kept open.
Kamath further said that pre-IPO orders act like bids and hence not in spirit. If everyone collects bids before the initial public offering (IPO), the sanctity of the book-making process is lost. Book building is a process of value discovery. The issuer discloses a price band or minimum price before opening the issue of securities.
A floor price or price band within which bidding can take place is disclosed at least two working days prior to the opening of the issue in case of an IPO.
The strong momentum in India’s IPO market is expected to continue as market regulator SEBI has cleared the draft papers of ten more firms, which include India1 Payments Ltd., Healthium Medtech Ltd., VLCC Health Care Ltd., Metro Brands Ltd., among others.
A group of Indian companies is looking to raise a combined over $1 billion through initial public offerings in December. If they all succeed, it could become the busiest December on record for an Indian IPO, surpassing the $972 million raised in the same month of 2012, data compiled by Bloomberg shows. Indian firms have already crossed a record IPO volume this year, with $15.5 billion raised so far.
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