Traders express concerns over the phased implementation of India’s new closing auction mechanism, while upcoming IPOs like Milky Mist Dairy draw substantial investor interest with high grey market premiums amid ongoing market adjustments.
The new closing auction session has unsettled traders and brokers, who say the mechanism has made it far harder to judge where the market will end the day. Under the phased system introduced by the Securities and Exchange Board of India on August 3, the final price is now determined through a defined auction window rather than the older averaging method, with the aim of improving price discovery and bringing Indian markets closer to global practice, according to market reports and Sebi’s circular.
The sharpest complaints have come from options and algorithmic traders, whose strategies depend on live price levels and repeatable closing patterns. Brokers say the new session has introduced a level of uncertainty that can quickly turn winning positions into losses, and some in the industry are debating whether to take their concerns to the regulator. One broker told Business Standard that no formal approach had yet been made, but discussions were under way to assess whether a representation was needed. Even so, expectations of a rapid retreat appear limited, with traders noting that Sebi rarely reverses regulatory changes quickly and that there has been only a small amount of trading data since the auction began.
The same week is also shaping up to be a busy one for the primary market. Business Standard reported that the IPOs of Technocraft Ventures and LEAP India will close, while offers from Molbio Diagnostics, Dhoot Transmission, Milky Mist Dairy Food, Shiprocket and Behari Lal Engineering will open and finish over the same period. Together, the seven issues are seeking to raise ₹10,312 crore, with grey market premiums of around 20% for both Shiprocket and Milky Mist Dairy Food and close to 30% for Dhoot Transmission, according to the report.
Milky Mist’s planned listing has drawn particular attention because of its recent growth. IPO review material shows the dairy company lifted revenue from ₹1,821.61 crore in FY2024 to ₹2,349.50 crore in FY2025, while profit after tax rose from ₹19.44 crore to ₹46.07 crore. Company profile material also says the business sources milk from tens of thousands of farmers across South India, sells through thousands of distributors and has built a sizeable presence in value-added dairy products such as paneer and cheese.
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