Sebi issues price band formulation
Applicable for share trading on first day post IPO
image for illustrative purpose
New Delhi: To check irregular movement in stock prices, Sebi on Tuesday came out with a new framework for fixing the price band for trading in shares on the first day of listing after an initial public offering.
The decision has been taken after discussions with stock exchanges and Sebi's Secondary Market Advisory Committee (SMAC), according to a circular. For trading on the first day pursuant to Initial Public Offering (IPO) or re-listing, Sebi said that call auction sessions would continue to be conducted separately on individual exchanges and orders would be matched by respective exchanges after computation of equilibrium price. In case the difference in the equilibrium price between exchanges in percentage terms is more than the applicable price band for the scrip, a Common Equilibrium Price(CEP) would be computed by exchanges.
“The CEP would be the volume weighted average of equilibrium prices on individual exchanges as determined by the call auction,” the regulator said.
