QIBs get the cake and eat it too

Sebi is yet to ask QIBs to pay up while bidding for shares in IPOs. As of now, retail investors and non-institutional investors are asked to pay up 100 per cent of their money, while applying for IPO shares. When shares are not allotted they get back refunds after almost 30 to 40 days. However, QIBs just fill up a form and payment is made only when allotment is done.

‘‘This is ridiculous. QIBs are big investors like foreign funds, local mutual funds, FIs and investment banks don’t pay and apply for a huge number of shares. On the other hand, small investors have to pay up first and their money is blocked till the allotment is made,’’ said a market source. The huge QIB response is due to the non-payment of money while bidding for the shares. This gives a distorted picture of the real demand for the IPO. Almost all the IPOs of recent times have oversubscribed within the first 30 minutes only.