Home / Business and Economy / Sebi Chief Demands IPO Disclosure Overhaul
Sebi Chief Demands IPO Disclosure Overhaul
15 Jan
Summary
- Sebi chairman Tuhin Kanta Pandey urged for more rigorous IPO disclosures.
- Companies must clearly explain past capital raisings and control changes.
- Valuation mismatches between unlisted and listed markets flagged.
Securities and Exchange Board of India (Sebi) chairman Tuhin Kanta Pandey has mandated more rigorous disclosures in IPO offer documents. He stressed the importance of detailed explanations regarding risk factors, valuation rationale, and how funds raised will be utilized. Pandey noted that gaps in information not only confuse investors but also extend fundraising processes due to regulatory reviews.
Pandey further stated that disclosures concerning capital structure must explicitly detail past capital raises, preferential allotments, and any changes in control, particularly those occurring close to the IPO. He also called for enhanced transparency in explaining business models, revenue, and cost drivers, emphasizing that Management Discussion and Analysis sections should go beyond mere descriptions to critically analyze performance drivers.
The Sebi chairman also drew attention to discrepancies between valuations in the unlisted market and discovered prices during IPO book-building. He indicated that Sebi is exploring ways to address the surge in unlisted market activity, in consultation with the Ministry of Corporate Affairs. These remarks come as India leads the global IPO market in terms of issue numbers.
