After a long time, we have had massive activity in the IPO market, with Rs 2.6lk cr blocked in bank accounts for IPOs worth Rs 7.6k cr.

If this was 2003, it would take 16 working days (or ~1 month), and the entire money would have moved to investment bankers and cost investors (an interest forego) at least 0.5% (assuming 6% pa) or Rs 1300 crores.

T+16 became T+12, T+6, and from Sep 2023 it is T+3 (~1week). Now, the money never leaves the bank account until allotment. While institutional investors might miss out on interest income with money blocked in current bank accounts which don’t yield any interest for those 3 days, retail investors continue to earn the interest from their savings accounts during the IPO process.

In almost every aspect, capital market regulations in India have improved phenomenally over the last 20 years, especially in the last five years.

Image: Economic Times

Go to link →