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Sebi will not interfere in IPO pricing

Companies need to be more forthcoming on disclosures on how valuations have changed between a pre-IPO placement of shares and the price of the issue, says Sebi chairman
Madhabi Puri Buch
Madhabi Puri Buch
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PTI   |   Mumbai   |   Published 14.09.22, 01:18 AM

Sebi has “no business” suggesting IPO pricing for new-age tech companies, and it is the investment bankers who should allay any concerns, chairperson Madhabi Puri Buch said on Tuesday.

Buch said companies need to be more forthcoming on disclosures on how valuations have changed between a pre-initial public offering (IPO) placement of shares and the price of the issue.

“A lot has been said about the pricing of IPOs of the new tech companies. Our view is simple. At what price you choose to do your IPO is your business. We have no business to suggest the price. You are free to price the issue at whatever price you consider appropriate,” Buch said at an event organised by Ficci here.

It can be noted that there have been concerns about investors, especially the unsuspecting retail ones, being taken for a ride due to high valuations.

The share price of payment platform Paytm collapsed to a third of the IPO issue price within a few weeks of listing.

A member of the audience asked Buch about remedial measures which can be adopted. Buch said it is for the i-bankers to reply on such concerns. 

Seeking to drive the point about disclosures, the first woman chief of Sebi explained through an example of a company selling shares to investors at Rs 100 and then asking for Rs 450 in an IPO within a few months.

She said a company is free to ask for a higher price, but needs to disclose what happened in the intervening period which justifies the massive change in the valuation.



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