What IPO Safety Net?

• SEBI has come up with norms for mandatory safety net mechanism in IPOs. 

• According to SEBI, "the safety net mechanism would be available for all securities allotted to original resident retail individual allottee that had made an application for up to 50,000 Rs."

• Safety Net is mandatory for all the IPOs going forward

• Safety Net will be triggered if the price of the shares has depreciated by more than 20 % from the issue price.

• Safety Net will be effective for six months from the date of trigger.