7 December, 2008

Indian companies are facing a tough time rasing money through IPOs because of the stock market meltdown.  In face of severe negative sentiment in the stock market many companies have allowed their IPO clearances to lapse to avoid compromising on their valuations.

The IPO validity lapsed after a period of three months but now Indian companies will have one year's time to launch their IPOs or rights issues after the clearance of draft prospectus by SEBI.

SEBI at its board meeting on Thursday decided to extend the validity of its approval for IPOs and rights issues from three months as of now to one year, subject to updating of documents by the issuer.

Fund managers welcomed the decision on Thursday making listing mandatory for close ended schemes of mutual funds, and disallowing early exit from these schemes.