Market regulator Securities and Exchange Board of India (Sebi) is adopting a cautious approach in giving the green signal to medium and small-sized initial public offerings (IPOs).A total number of 22 offer documents, each planning to raise anywhere between Rs 86 lakh and Rs 216 crore from the primary market in the beginning of 2005, await Sebi clearance.A scrutiny of data compiled by Prime Database, a database company that specializes in tracking the primary market, shows that these companies, if given a go-ahead by Sebi, will raise a total amount of Rs 1077.01 crore.Sebi is, however, in no hurry to clear these offer documents that have been filed with it in the last three months. A senior Sebi official said, “Sebi has to carefully scrutinise every issue that is coming our way in this market. All the offer documents are being examined carefully and many a time we have to send them back to the companies and their lead managers before we clear them.”“This is being done with the intention of clearing only those offer documents where the companies have strong potential and good fundamentals,” the official added.K. Srinivas, head of investment banking, UTI Securities, however, says the Sebi is being over-cautious in its approach. “A small-sized issue does not necessarily mean that it is a bad issue, as the bigger ones have also disappointed the investors after getting listed at relatively higher premiums,” he said.“The market regulator has already laid down stringent disclosure norms in the offer documents after the experience of the ’90s. All the companies that have filed offer documents in the recent past have adhered to these norms and there is little scope left for loopholes,” Srinivas added.Of the 22 offer documents filed with Sebi, 15 issues have sizes ranging from Rs 86 lakh to Rs 21 crore.
