Mumbai Securities and Exchange Board of India (Sebi) has no role in initial public offering (IPO) pricing, chairperson Madhabi Puri Buch said on Tuesday, even as she called for a detailed disclosure-based regime. emphasized. Efficient functioning of capital markets.
“People are free to do whatever they want, but they must disclose,” Buch said at a capital markets event organized by the Federation of Indian Chambers of Commerce and Industry (FICCI).
The Sebi chief’s remarks come amid growing debate over the role of the market regulator in the pricing of IPOs. It follows a sharp drop in shares of several new-age technology firms since they went public in 2021, leaving investors with huge losses and concerns about inflated valuations of such companies ahead of their share sale.
“A lot has been said on the pricing of IPOs of new age technology companies. Our idea is simple that you have chosen your business at what cost to do your IPO; We have no business to suggest otherwise. The days of CCI (Capital Issue Controller) are long gone. Parliament has ordered SEBI that we should not have any opinion on pricing of issues. You are free to price the issue at any cost,” Butch said. However, the specific procedure is guided by SEBI, including the manner of filing IPO documents or the manner in which they are placed in the public domain,” he said. couple.
“Assuming a private party if a company is coming into an IPO three-six months back, and has placed its equity with a party 100 but wants to come to the market 450…we expect you to tell the investor what accounts for the difference 100 more 450. What has changed? This can be internal or external metrics. Essentially, SEBI expects disclosures on these aspects.”
SEBI is also dependent on data and technology for efficient functioning. “Every single policy that comes out today is back-tested by data. There is no longer a single piece of paper within SEBI that is not backed by data. We will avoid dogma and we will embrace data,” she said.
She also pointed out that as market dynamics are changing at a rapid pace, and “technology is the ‘magic bullet’ that will help reduce costs, better serve the customer, better control and compliance.” This will also help SEBI. Solving financial wrongdoings such as insider trading, front running and market manipulation that have become common in the trading ecosystem.
In the meantime, the regulator is evaluating whether and how disclosure should be made to the public on trading in derivatives.
“India is not a nanny state. If someone wants to trade in the futures and options (F&O) segment, we don’t think we should stop them,” Buch said, adding that the regulator is concerned about the increase in retail participation. Is. F&O section. “There is information that SEBI is looking into and evaluating what form and manner (disclosure) needs to be disclosed to the public,” she said.
priyanka.gawande@livemint.com
catch all business News, market news, today’s fresh news events and breaking news Updates on Live Mint. download mint news app To get daily market updates.