Sebi order may make IPO process a lot more tedious

The recent directive by the Securities and Exchange Board of India (Sebi) relating to updations in the offer documents for initial public offerings could make the process as tedious as filing a fresh offer document, say some merchant bankers."Filing a fresh document with new changes would be very much similar to filing a fresh document," says a senior merchant banker with a domestic brokerage firm."I agree companies cannot go on making changes, but at the same time there is no time bound commitment from the regulator that it will be taken on a fast-track basis," he says.In February this year, the regulator had extended the validity of its approval for IPOs and rights issues to 12 months from three months earlier.The regulator had also said that before the opening of the issue, every issuer shall file an updated offer document with the board at least one month prior to filing it with the Registrar of Companies or the stock exchange. It has now specified the details that will constitute significant changes and the additional fees.The move came after Sebi observed that in some cases material changes informed by merchant bankers resulted in major deviations from the draft offer document that was available in public domain and called for fresh scrutiny/processing of the draft offer document by the Sebi board. The main issue is that it should be cleared in a time-bound manner," adds another merchant banker at a firm, which has a couple of IPOs lined up in the next few months.