SEBI has decided to raise the minimum networth criteria for portfolio managers to Rs.2 crore from existing Rs.50 lakhs. Portfolio managers, whose networth is less than Rs.2 crore at present, will have to augment it to at least Rs.1 crore within the next six months and to Rs.2 crore in six months from the date of announcement of this regulation.
Currently, IPO allotment takes 21 days and the
refund process takes a further two weeks. But, banks were not paying interest on the money, which means investors are losing interest for 36 days while banks are benefiting from the float. But with the new rule investors will now enjoy interest on the same. So far, after every oversubscribed IPO, there are grievances of non-receipt of refunds from the investors. However, with the electronic lien system in place investors can get back their money right after the allotment.
While many analysts feel that the new system will make the IPO process more efficient and hassle-free. A few like Ashvin Parekh, National Industry Leader, Global Finance Services, Ernst & Young feel, “From the policy point of view, it’s a very significant move but from the process point of view it is equally critical. It calls for substantial amount of process challenge.” One thing is certain though, when it’s about getting their money back, investors now can breath ‘very’ easy.
Currently, IPO allotment takes 21 days and the
refund process takes a further two weeks. But, banks were not paying interest on the money, which means investors are losing interest for 36 days while banks are benefiting from the float. But with the new rule investors will now enjoy interest on the same. So far, after every oversubscribed IPO, there are grievances of non-receipt of refunds from the investors. However, with the electronic lien system in place investors can get back their money right after the allotment.While many analysts feel that the new system will make the IPO process more efficient and hassle-free. A few like Ashvin Parekh, National Industry Leader, Global Finance Services, Ernst & Young feel, “From the policy point of view, it’s a very significant move but from the process point of view it is equally critical. It calls for substantial amount of process challenge.” One thing is certain though, when it’s about getting their money back, investors now can breath ‘very’ easy.
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Source : IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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