Regulation of IPOs by SEBI-Some recent developments

There have been a string of developments in the field of IPOs, overseen by the SEBI. In fact, more focussed regulations has been an agenda of the SEBI for some time now. The SEBI had already set up an expert group to examine the entire IPO process. The SEBI has deemed the current regulations as not being investor friendly, and has therefore agreed to change the format, and to bring down the pages of the document. The SEBI is also attempting to bring in an e-IPO process, which would be paperless, and would make the bidding process faster.

But the last few days have seen a flurry of activity relating to IPOs and regulation by the SEBI.

Qualified Foreign Investors allowed to invest in Indian equity markets

India has been facing a bearish run in terms of foreign investment in its capital markets. The poorly performing market has churned out astonishingly bad results in the past year. So much so that it reportedly prompted a net outflow of almost USD 380 Million in foreign investment in 2011.

To overturn this dismal trend, the Ministry of Finance, Government of India announced on January 1, 2012 in a press release, that it had decided to allow Qualified Foreign Investors [‘’QFIs’] to invest directly in the Indian equity market. This is a welcome initiative that should go a long way in dispelling the gloom that has gripped the Sensex.  This is the second measure taken in 2011 to increase foreign activity in Indian capital markets. The first was in August when QFIs were permitted direct access to Indian mutual fund schemes.