Traders and brokers in India are unsettled by the phased rollout of the new closing auction mechanism, which has made final prices less predictable, just as a flurry of IPOs approaches, raising questions over regulatory impact and market stability.
India’s new closing auction session has unsettled traders and brokers, who say the mechanism has made the final settlement price harder to forecast and has disrupted strategies built around the last minutes of trade. Options and algorithmic traders appear to have been hit hardest, with market participants saying positions that look profitable during the session can quickly turn negative once the auction reprices the close. One broker said no formal complaint has been filed yet, but industry participants are discussing whether to raise the issue with the regulator. Another said a quick reversal looks improbable because the Securities and Exchange Board of India rarely undoes regulatory changes in short order and the market has only a small sample of trading sessions to assess the impact.
SEBI ordered the phased rollout of the Closing Auction Session on January 16, with the new framework taking effect from August 3, 2026 in the equity cash segment. According to the regulator and market commentaries on the change, the aim is to create a single, more reliable closing price and reduce distortions caused by large orders in the final stretch of trading. That makes the present complaints notable: what was designed as a cleaner benchmark is, at least in the opening phase, being described by traders as a source of fresh uncertainty.
Against that backdrop, the initial public offering market is set for a busy week. Technocraft Ventures and LEAP India are due to wrap up their offerings, while Molbio Diagnostics, Dhoot Transmission, Milky Mist Dairy Food, Shiprocket and Behari Lal Engineering are set to open and close, together seeking to raise ₹10,312 crore. Grey market chatter puts Shiprocket and Milky Mist at premiums of around 20%, while Dhoot Transmission is said to be leading with a premium of nearly 30%; the rest are quoted in the 8% to 18% range.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
