State-run Coal India had come out with the country''s biggest IPO of over Rs 15,200 crore in October last year and its retail portion was oversubscribed by over 2 times.
However, there have been complaints that over 10,000 retail investors were deprived of an opportunity to buy CIL shares due to technical glitch on retail brokers'' front.
Meanwhile, media quoting sources reported that market regulator SEBI has asked the six investment bankers to "ensure that these CIL retail investors are paid before those brokers/ sub-brokers are hired for another issue".
Industry sources said in an IPO the retail portion is handled by syndicated brokers and sub-brokers and not by the merchant bankers. The CIL issue was not any different and the roles of i-bankers and brokers are clearly defined, I-bankers have no direct role in retail distribution, they added.
The issue assumes significance because if the media report of SEBI''s directive to the six merchant bankers is true, the order could adversely impact all new issues that are being planned.
Sources said Sebi''s restrain order on retail brokers has to be resolved at the earliest, as without these sub-syndicate members no new initial public offer can be sold to retail investors as they dominate the industry.
"Without these banned brokers, retail participation just will not happen," an industry source said.
Citigroup, Kotak Mahindra, Morgan Stanley, Bank of America-Merrill Lynch, Deutsche Bank and Enam Securities were the merchant banks that managed Coal India''s IPO last October.
They could not be contacted independently to ascertain the developemnts.
Market regulator SEBI was also not availble for comments.