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SEBI On IPO: In 2021, many such companies brought IPO, whose share price is trading much below the IPO price. Investors investing in these IPOs are suffering huge losses, due to which the regulator of the stock market, SEBI has been on target. There has been a clarification from SEBI regarding this issue. SEBI Chairperson Madhavi Puri Buch has said that SEBI has no role in deciding the pricing of upcoming IPOs in the stock market. However, he definitely said that companies will have to make all disclosures for the correct operation of the capital market.
SEBI has nothing to do with IPO price
Addressing the annual capital markets conference organized by FICCI, Madhavi Puri Buch said that a lot is being said about the pricing of IPOs of new generation internet companies. He said, we believe that at whatever price you are bringing the IPO, we have nothing to do with it. SEBI has got this mandate from Parliament that we have no opinion on IPO pricing. You are free to decide the price of the IPO at whatever price you like. But these instructions have been given by SEBI on how to file the draft paper of IPO and all disclosures should be made.
All disclosures required regarding the price
The SEBI chairperson said with an example that a company is selling shares to investors at a price of Rs 100 per share. But after a few months when she brings the IPO, she asks for a price of Rs 450. He said the company is free to ask for a higher price, but it should disclose what has changed in the intervening period that the share price has gone up so much.
heavy loss to investors
In fact, last year many internet companies came out with IPO which is trading well below its issue price. Like Paytm’s IPO came at a price of Rs 2150 per share. But now the stock is trading at Rs 735. That is, 66 percent below the issue price. The IPO of Car Trade Tech, which came at a price of Rs 1585 per share, is now trading at Rs 708, 55 percent below the IPO price. So the IPO of Zomato came at a price of Rs 76, which is currently trading around Rs 65. Due to the flop show of these IPOs, SEBI is on the target of investors.
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