Sebi Chairperson Madhabi Puri Buch on Friday said three merchant bankers were frequently indulging in inflating IPO Subscriptions during the share sales and warned to take action against them.
“Sebi also has data and evidence on “mule accounts” wherein credentials of an innocent person are used to front-run on stocks by those wanting to not leave a trace of trades,” the Sebi Chairperson said while addressing an annual convention organized by a lobby grouping of investment bankers in Mumbai.
The Sebi Chairperson, however, did not name the 3 merchant bankers who were found to indulging in such malpractices.
Of late, there is a tendency to inflate the IPO application numbers to give an impression of the high amount of subscriptions, Buch said and added that the Regulatory Authority had data and evidence on this.
“We are also noticing practices wherein there is a pattern of which kind of merchant bankers tend to…frequent names occurring in such malpractices. Therefore, in the interest of investors, we will review the policy as well as (start) enforcement actions,” Buch said.
Buch also said that it has been noticed that amidst a huge surge in IPO activity, comments come wherein many companies have witnessed very high investor demand in the run-up to the listing.
The high interest typically leads to a company listing at a premium to the offer price, Buch added.
