SEBI has no business to interfere in pricing of IPOs of start-ups, says SEBI chairperson

14 Sep 2022 , 09:29 AM

Madhabi Puri Buch, Chairperson of the Securities and Exchange Board of India (SEBI), stated that modern tech firms are free to set the price of their shares for an initial public offering (IPO) at whatever level they feel “acceptable.”

“The Parliament has mandated that we have no position on issue pricing, and you are free to price the issue at whatever price you feel is suitable,” she continued. “The days of the CCI (Competition Commission of India) are long gone,” she said.

Buch spoke at the 19th Capital Markets Summit, which was held in Mumbai and hosted by the industry group Federation of Indian Chambers of Commerce and Industry (FICCI).

She said that a firm seeking a higher issue price than its pre-IPO placement values are not subject to SEBI regulations.

She did, however, demand accurate disclosures about equity worth and urged the businesses to defend significant valuation adjustments.

“We have no say in the issue if a company filing for an IPO deposited its equity with a private party at INR 100 three or six months ago and now it wants to come to the market at INR 450,” Buch said.

It could be internal or external metrics, but report them to the investor, the chairperson said. “However, when you reveal, we require you to disclose to the investors what accounts for the difference between INR 100 and INR 450.

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