New-age tech IPO valuation: Chairman says SEBI has no role
Mumbai:
President Madhabi Puri Buch said SEBI has “nothing to do” in recommending IPO valuations for new-age tech companies, and that investment bankers themselves should allay any concerns surrounding the matter. .
Ms. Buch, an investment banker, said that companies need to be more revealing about how valuations have changed between issuing shares before their initial public offering (IPO). ) and the price requested in the issuance. .
“There’s been a lot of talk about pricing new tech companies’ IPOs. Our point is simple. It’s up to you what price you choose to IPO. We don’t have a business. to propose a price… You are free to value the issue at whatever price you deem appropriate,” said Ms. Buch at an event organized by industry lobbying Ficci in this.
It can be noted that there have been concerns about investors, especially unsuspecting retailers, being charged due to high valuations by new tech companies.
The share price of payment platform Paytm fell to just a third of its IPO issue price within weeks of listing, and a few other companies faced similar outcomes.
Amid speculations about SEBI’s response to such issuances, a member of the audience asked MS Buch about possible remedies to protect investors’ interests.
Ms. Buch answered the question that there were a lot of i-bank staff selling such issues in the audience and also the period in which she spoke, and i-bank staff had to answer about the issues. that concern.
Seeking to promote the point of disclosure, SEBI’s first female director explains through the example of a company that sells shares to investors for Rs 100 and then asks for Rs 450 in one round. IPO within a few months.
She said a company is free to ask for a higher price, but needs to disclose what happened during the intervention period to justify the large change in pricing.
Meanwhile, she also said that SEBI is analyzing data and information about retail participation in the futures and options segment, which could lead to more disclosure to them.
“If someone wants to trade in the F&O segment, we don’t think we should stop them… (but) we are assessing how and how (information) should be disclosed to the public. want to enter the F&O market,” she said.
She said SEBI will continue to be consultative and democratic in its approach while making regulations and driven only by data.
As part of the restructuring process, SEBI has appointed one to three officials in each division whose key resource area is to come up with regulatory ideas that will get the industry to “celebrate,” Ms. speak.
The regulator has also been looking for changes in the SEBI Act that would help the agency test potential ideas in a regulatory sandbox, she said.
Going forward, SEBI will continue to reinforce the importance of transparency in each of its regulations, Buch assured the industry, emphasizing that “our regime is disclosure-based”.
SEBI exists to facilitate capital formation on both the debt and equity fronts in the economy, and wants to remove all dogma as it charts the way forward, Buch speak.
In response to a question, she suggested that SEBI is against regulating mutual fund distributors and asset management firms must ensure that their agents are in good working order.
