New Delhi, May 25 -- The Securities and Exchange Board of India (Sebi) has proposed tweaks to pre-open call auction sessions for initial public offerings (IPOs). India's stock market regulator wants rules relaxed for the time window in which an exchange is fed with data on 'buy' and 'sell' orders for a price to arise that balances demand with supply.

An IPO's 'dummy price band' around its issue price is designed to keep out distortively over- or underpriced bids, but since stiff limits could cap a debut share's price below its fair equilibrium, a key Sebi proposal seeks to stretch them in automatic 10% jumps if at least five unique-PAN traders bid beyond the band.

To the extent greater band elasticity spells smoother price discovery, th...