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IPO or An initial public offering is when a
private company or corporation raises investment capital by offering its stock
to the public for the first time. Growing companies seeking capital to expand
are those that generally use initial public offerings, but large,
privately owned companies or corporations looking to become publicly traded can
also do them.
Read more: Initial Public Offering (IPO) https://www.investopedia.com/terms/i/ipo.asp#ixzz5JUqi7JrU
What is IPO GRADING?
IPO or An initial public offering is when a
private company or corporation raises investment capital by offering its stock
to the public for the first time. Growing companies seeking capital to expand
are those that generally use initial public offerings, but large,
privately owned companies or corporations looking to become publicly traded can
also do them.Read more: Initial Public Offering (IPO) https://www.investopedia.com/terms/i/ipo.asp#ixzz5JUqi7JrU
IPO
GRADING in India was
a system to rate IPO as an optional feature in April 2006. A year later in 2007
it was made mandatory. A few years later in 2013 again made it mandatory.
PROBLEMS/ ISSUES-
1.
There are no
correlation between IPO GRADING and post listing performance.
2.
IPO GRADING process
never took into consideration - The price of public issue, factors in only the
company's fundamental management quality, Business risk etc.
3.
SEBI has same
analysis as CRISIL report companies with an IPO grade 415, which indicate above
average fundamental traded at an average PIE multiple of 28 times.
4.
SEBI board has also
approved the deletion of the provision related to the safety net feature which
was introduced in 2013
The SEBI is looking at
ways to facilitate fund-raising by small and medium enterprises (SME) by
bringing such companies and merchant bankers where people from both sides can
interact closely. Scrapping IPO grading will help these sector to be boosted.
Reference
- https://www.sebi.gov.in/sebi_data/commondocs/ipograding_p.pdf
