The Securities and Exchange Board of India (SEBI) on April 11, 2023, issued a notification regarding the formulation of price bands for the first day of trading pursuant to Initial Public Offering (IPO), re-listing, etc. in the normal trading session.
It has been decided for trading on the first day pursuant to IPO or re-listing –
- Call Auction sessions would continue to be conducted separately on individual exchanges and orders would be matched by respective exchanges after the computation of the equilibrium price.
- If the difference in the equilibrium price between exchanges in percentage terms (i.e. absolute difference/minimum of equilibrium prices, expressed as %) is more than the applicable price band for the scrip, a Common Equilibrium Price (CEP) would be computed by exchanges. The CEP shall be the volume-weighted average of equilibrium prices on individual exchanges as determined by the Call Auction.
- The exchanges shall set the aforesaid CEP in their trading systems and apply uniform price bands based on the CEP, as applicable.
- Only unexecuted pending orders from the Call Auction session within the aforesaid price band shall be carried forward to the normal market segment.
The provisions of this circular shall come into effect after 60 days from the date of issuance of this circular.
[Notification No. SEBI/HO/MRD-TPD1/CIR/P/2023/55]
