investment in ipo
These days many new IPOs are coming in the IPO market. In the last weeks, the issues of Lenskart and Grow were opened in the market, which were discussed a lot. In the coming week also, 7 new issues including Physicswala will open in the market. While investing in IPO, common investors have many questions related to the company in their mind. For example, what is the size of the IPO, how are the fundamentals of the company. For all this information, investors often go to experts.
But SEBI has now prepared a plan to make investment easier for investors. The market regulator has made a new proposal to make the IPO process easier. Under this, companies will have to issue a separate offer document summary, in which the most important information will be given in short words. Apart from this, there is also a plan to simplify the process related to shares pledged before IPO.
SEBI said that the current offer document is quite large and complex, due to which common investors avoid reading it. As a result, they are not able to fully understand the important things related to IPO and are not able to respond properly to the documents. Usually, the offer document includes detailed information about the company’s industry, business model, financial condition, ongoing matters, management opinion, rules and regulations and technical information. All these disclose important information related to public issues and on this basis the regulator conducts investigation.
There will be less trust in wrong information
SEBI said that common investors often take investment decisions on the basis of gray market trends or incomplete information on social media, which sometimes proves to be wrong. If the company itself provided a concise and standardized summary of key information, investors would be less dependent on non-regulated sources. According to SEBI, due to the large size of the offer document, important information remains scattered in different parts. Therefore mandating a standardized summary will ease access to information and provide better understanding to investors. SEBI has sought suggestions from the common people on this proposal till December 4.
(Disclaimer- TV9 Hindi does not advise investing in any IPO. Do take expert opinion before investing.)