SEBI Tightens IPO Fund Use Rules Amid Boom, Boosts Investor Protection

• SEBI plans to tighten fund utilization norms for IPOs, rights issues, and other equity fundraising mechanisms.
• Credit rating agencies, acting as fund tracking agencies, will directly submit utilization reports to stock exchanges and audit committees.
• Monitoring agencies must submit reports within 45 days from the end of the reporting quarter; non-cooperation by companies will incur fines.
• SEBI considers removing the fresh issue size threshold, making monitoring mandatory for all issuances, including SME IPOs.
• Scope of monitoring may expand to cover 100% gross issue proceeds, including pre-IPO funds and end-use by investee entities.