Sebi`s QIP norm may end price manipulation
The rampant manipulation in share prices of companies going in for a qualified institutional placement (QIP) could now be curtailed, following the Securities and Exchange Board of India's (Se On August 13, the capital market regulator said QIPs should be priced based on the average price of shares two weeks prior to the issue instead of taking the average price of six months or 15 days, whichever is higher. TIGHT ANALYSIS Typically, the promoters of a company diluted a nominal stake of 10-15 per cent during an initial public offer (IPO) Post-issue, it became easy for operators to rig the share price as a result of lower liquidity. This later ensured that companies could execute private placements at better valuations Market experts said earlier several companies planning a QIP issue were actively involved in rigging share prices before offloading their stake, enabling them to earn higher returns. ...