Sebi has “no business” of setting IPO pricing for new-age tech companies, and it is investment bankers who should address any concerns about the issue, chairperson Madhabi Puri Buch said on Tuesday.
Ms Butch, an investment banker-turned-regulator, said companies need to come up with more disclosures about how valuations have changed between pre-initial public offering (IPO) placements of shares and the price being sought. has been issue.
“A lot has been said about pricing new tech companies’ IPOs. Our idea is simple. At what price you choose your IPO, it’s your business. We have no business to suggest a price.” .. You are free to deal with this issue at whatever cost you think is fair,” Ms. Butch said at an event organized by industry lobby FICCI here.
It may be noted that investors, especially unsuspecting retail ones, have concerns about the high valuations demanded by new-age tech companies. The share price of payments platform Paytm fell to a third of the IPO issue price within weeks of listing, and some other companies faced similar consequences.
Amid speculation about SEBI’s response to such issues, an audience member asked Ms. Butch about the remedial measures that could be adopted to protect investor interest. M. Butch avoided the question saying that there are many eye-bankers who sell such issues to the audience and the platform she was speaking from, and it is up to the eye-bankers to address such concerns. Reply.
Trying to take the point of disclosure further, SEBI’s first woman chief explained through the example of a company selling shares to investors at ₹100 and then asking for ₹450 in an IPO within a few months .
It said a company is free to ask for a higher price, but needs to disclose what happened in the intervening period which justifies the drastic change in valuation.
Meanwhile, he also said that SEBI is analyzing the data and information on retail participation in the futures and options segment, so that more disclosures can be made available to them.
“If someone wants to do business in the F&O segment, we don’t think we should stop them… (but) we are evaluating what form and manner in which (information) needs to be disclosed to the public.” who are willing to participate in the F&O market,” he said.
He said that SEBI will remain consultative and democratic in its approach while framing the rules and will be driven by data only.
He said as part of a restructuring exercise, Sebi has appointed one to three officers in each department, whose main resource is to come up with ideas on sector regulation that will “celebrate” the industry.
He said the regulator has also sought changes in the SEBI Act which will help in testing possible ideas in the regulatory sandbox.
Going forward, SEBI will continue to reinforce the importance of transparency in each of its regulations, Buch assured the industry, underlining that “we have a disclosure-based regime”.
SEBI exists to facilitate capital formation in the economy on both the debt and equity front, and seeks to drop all dogma as it decides the way forward, Buch said.
Responding to a question, he said SEBI is against regulating mutual fund distributors, and it is up to asset management companies to ensure that their agents do the right thing.