A survey of the regulation of public offering of shares and convertible securities in India

Abstract

The idea of regulating public offering of securities typically brings to mind the Disclosure and Investor Protection Guidelines, 2000 (DIPG) of the Securities and Exchange Board of India. In addition to the DIPG, which governs the conduct of Indian issuers, there are distinct laws governing the corporate financing aspect of securities offerings as well as the decision to list a security for public trading. Further, a slew of regulations have evolved on account of the number of specialist agencies who manage specific aspects of a modem public offering, which in itself is a complex process of producing, certifying and disseminating information. The regulations seek to minimise the risk of opportunistic behaviour or mere indifference on the part of the various participants in the issue process. Using a simple framework based on literature in the fields of corporate finance, initial public offerings and securities regulations this paper surveys the various agencies involved in the public offering process in India and the purpose that these regulations might possibly serve. ‘The survey could be a useful first step towards further research into the evolution and the impact of these institutions on the development of the securities market in India.