NEW DELHI: Securities and Exchange Board of India (Sebi) chairperson Madhabi Puri Buch on Tuesday said the capital market regulator has no role in the pricing of initial public offerings or IPOs, adding that there is a need for detailed disclosure for the better functioning of the market.
“We have no problem even if a company has placed its equity with some party at Rs 100 three or six months ago and now it wishes to come to the market at Rs 450. However, we expect you to disclose to the investor what accounts for the difference between Rs 100 and Rs 450, explain what has happened during the period and justify the change,” Buch said in her first public address after being appointed as Sebi chief over six months ago on February 28. She was speaking at FICCI’s ‘Annual Capital Markets Conference’ event.
Her remarks come after several new-age tech companies that got listed last year wiped out crores of investors’ wealth overnight, leading to debate on the pricing of the issues and Sebi’s role in it. PayTM, whose share prices have fallen about 53% since listing in November 2021, had priced its IPO much higher than its private placement price. Its dismal performance on the market, along with the selling seen in Zomato, PB Fintech and Nykaa shares so far in 2022 has raised concerns over the interest of retail investors.
“The days of the competition commission of India are gone and the parliament has mandated us that we should have no view on the pricing of issues. You are free to price the issue at whatever price you consider appropriate,” said Buch. Buch also asked the industry to abide by regulations and sought out more transparency. “Without industry support it is difficult for Sebi to get rid of evils that we know of -- front running, insider trading, fraudulent transactions and manipulations of stock prices,” she said.
She said Sebi is analysing data on retail participation in futures and options segment, which may lead to more disclosures to be made available to them. “Sebi will continue to be consultative and democratic in its approach while making regulations and be driven only by data,” she said.