The Securities and Exchange Board of India (SEBI) has recently announced some major changes in the Indian stock market that are set to come into effect from July 2025. These changes have been made with the aim of making the stock market more accessible and transparent for investors. The minimum application amount for initial public offerings (IPOs) has been increased to ₹2 lakh, while the lot sizes have been revised. Additionally, there will be no cut-off price or bid revisions allowed from July 2025. This move by SEBI is expected to bring about a positive change in the Indian stock market and attract more investors.
The current minimum application amount for IPOs in India is ₹10,000, which is considered to be quite low compared to other countries. This has led to a large number of retail investors participating in IPOs, resulting in oversubscribed issues and a high level of volatility in the market. By increasing the minimum application amount to ₹2 lakh, SEBI aims to filter out small investors and attract more serious and long-term investors. This move is expected to bring stability to the market and reduce the risk of oversubscribed IPOs.
Moreover, SEBI has also revised the lot sizes for IPOs. Lot size refers to the minimum number of shares that can be bought or sold in an IPO. The current lot size for IPOs is 1,000 shares, which has now been increased to 10,000 shares. This means that investors will have to invest a minimum of ₹2 lakh (10,000 shares x ₹20 per share) to participate in an IPO. This move is expected to bring down the number of applications for IPOs, making the process more efficient and reducing the chances of oversubscription.
Another significant change announced by SEBI is the elimination of the cut-off price and bid revisions in IPOs. Cut-off price refers to the price at which an investor can bid for shares in an IPO without specifying the exact price. This practice has often led to a high level of speculation in the market, resulting in inflated prices for IPOs. By eliminating the cut-off price, SEBI aims to bring more transparency and fairness in the IPO process. This will also prevent any manipulation of prices and ensure that investors are paying the actual value of the shares.
Furthermore, SEBI has also prohibited any bid revisions in IPOs from July 2025. Bid revision refers to the practice of investors changing their bids multiple times during the IPO process. This often leads to confusion and chaos in the market, making it difficult for small investors to participate. By eliminating bid revisions, SEBI aims to simplify the IPO process and make it more accessible for all investors.
These changes announced by SEBI are expected to bring about a positive transformation in the Indian stock market. The increased minimum application amount and revised lot sizes will attract more serious and long-term investors, resulting in a more stable market. The elimination of cut-off price and bid revisions will bring transparency and fairness to the IPO process, making it more efficient and accessible for all investors.
Moreover, these changes will also benefit companies going public. With a higher minimum application amount and revised lot sizes, companies can raise more capital from a smaller number of investors. This will also reduce the cost of issuing an IPO for companies and make the process more efficient. Additionally, the elimination of cut-off price and bid revisions will ensure that companies receive the actual value of their shares, without any manipulation of prices.
These changes by SEBI are a step in the right direction towards creating a more investor-friendly and transparent stock market in India. It will not only benefit investors and companies but also boost the overall economy. With a more stable and efficient market, more companies will be encouraged to go public, leading to job creation and economic growth.
In conclusion, SEBI’s decision to increase the minimum application amount, revise lot sizes, and eliminate cut-off price and bid revisions from July 2025 is a welcome move for the Indian stock market. It will bring stability, transparency, and efficiency to the IPO process, making it more accessible for all investors. This move will not only benefit investors and companies but also contribute to the growth of the Indian economy. Let us look forward to a brighter and more prosperous future for the Indian stock market.
