The survey said, "While the full investigation is still underway, this experience (the recent IPO scam) emphasises the need to shift away from a system of quotas to a non-discretionary price discovery through a unified auction, in a framework which is close to price discovery of the secondary market."

Currently, 35 per cent of the shares on offer in primary offerings are reserved for retail investors. Qualified institutional bidders are eligible for 50 per cent of the net issue, with 5 per cent of the QIB portion reserved for the domestic mutual funds. The rest is for non-institutional bidders.

Investigations by the market regulator the Securities and Exchange Board of India has revealed investors placing multiple bids in the IPO auctions, in order to benefit from the quota that has been made available to individual investors.

Emphasising the need for improvements in the securities market architecture to step up investments, the survey outlined "removing the problem of multiple bids by individuals seeking to profit from the quota for retail investors at the discretion of merchant bankers or the government by considering a pure auction for price discovery at the IPO, in much the same manner as the secondary market functions," and, "strengthening the investigation and surveillance process, so as to have a steady stream of success in enforcing rules, and punishing wrongdoers, with well-prepared and well-argued cases that are upheld by the courts" as significant measures.

The survey also said the IPO market has made enormous progress in the recent years, moving away from fixed-price offerings to price discovery through a screen-based auction.