In a bid to protect the interest of retail IPO investors who apply for share subscription during the IPO offer but are not offered the shares, SEBI on Thursday came up with the compensation parameter for them. This shall be effected in case of eligibility of the retail individuals but bankers default in the allotment.

Also, any time gap in respect of the grivenance redressal shall be compensated at the rate of 15%. Further there is a stipulated time frame for redressal of such a situation i.e 15 days time limit.

Further, the market watchdog said that there should be a mechanism to arrive at the minimum compensation payable in such cases. That should needless be taking into account the following factors that include number of times of oversubscription as per the category, allotment probability, opportunity loss to the investor, listing gains on the day of the launch of the scrip on the bourses.

"It is also proposed that in case of issues which are subscribed between 90-100 per cent -- that is non-oversubscribed issues --- the applicants would be compensated for all the shares which they would have been allotted," Sebi noted.

In the case when the listing price is below the issue price, no compensation shall be paid to the investor.

With Inputs From PTI