However, he added that companies should disclose more about how valuations changed during pre-IPO planning and the price sought for issue.
Addressing the annual capital markets conference organized by industry body FICCI, Buch said on Tuesday, “There is a lot to be said about the value of IPOs of technology companies. It is your job to see at what price you want to bring the IPO. It is not our job to suggest about it.
Giving an example, SEBI’s first woman head Butch said that a company is selling shares to investors at Rs 100 per share. But after few months when she brings IPO, she asks for Rs 450.
He said the company is free to ask for a higher price, but it should disclose what has happened in the intervening period that has caused the share price to rise so much.
It has been observed that retail investors are most affected by high valuations of new generation technology companies. Shares of payments platform Paytm fell to one-third of the issue price of the IPO within a few weeks of listing.
Asked questions on recent developments, Butch said investment bankers should answer. He said that the regulator will keep its stance democratic while framing the regulation and it will work only on the basis of data.
He said that as part of the restructuring process, SEBI has appointed one to three officers in each such department, whose main source is to bring such views on sector regulation, so that the industry can be ‘happy’.
He said the regulator wants to amend the SEBI law so that it can test possible ideas in the regulatory ‘sandbox’.
Source: navbharattimes.indiatimes.com
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