Zerodha founder Nithin Kamath in his recent twitter post explained why the online stock brokerage firm does not offer pre-IPO offers. Market regulator SEBI's ICDR regulations define a subscription period for an IPO during which it has to be kept open.
Kamath went on to add that pre-IPO orders act like bids & hence not in spirit. If everyone collected bids before the initial public offering (IPO), the sanctity of the book-building process is lost. Book building is a process of price discovery. The issuer discloses a price band or floor price before opening of the issue of the securities offered.
A floor price or price band within which the bids can move is disclosed at least two working days before opening of the issue in case of an IPO.
The strong momentum in India’s IPO market is expected to continue with the market regulator SEBI approving draft papers of ten more firms which includes India1 Payments Ltd, Healthium Medtech Ltd, VLCC Health Care Ltd, Metro Brands Ltd.
A clutch of Indian companies are pushing to raise more than $1 billion combined from initial public offerings in December. If they’re all successful, it could become the busiest December for Indian IPOs on record, surpassing the $972 million raised in the same month of 2012, data compiled by Bloomberg show. Indian firms have already surpassed the record for IPO volumes this year, with $15.5 billion raised so far.
