Companies and merchant bankers may soon be ordered by Securities & Exchange Board of India (SEBI) to limit all business transactions among them to the bare minimum and also to provide investors with a detailed analysis of the way they discover the price range for an IPO, a senior official revealed.

Speaking on the condition of anonymity, the official said that the new steps by the market regulator aimed at protecting investors' interest by preventing companied from over-pricing any IPO through a nexus between company promoters and merchant bankers.

The SEBI has already made it obligatory for merchant bankers to provide access to a track-record of the public offers managed by them.

In addition, SEBI is already mulling a proposal to ask company promoters and merchant bankers to give a capital protection guarantee for certain period to part of shares allocated to retail investors through IPOs.

The market regulator is also mulling further IPO reforms as part of its efforts to stimulate this segment as a favored investment route for the retail investors.

SEBI is taking steps to revive investment route for the retail investors after seeking a gloomy post-IPO performance of several companies over the recent years. In its investigations, the market regulator detected several cases in which company promoters and merchant bankers created nexuses and manipulated the public offers and also the post-listing share trades.