Sebi rules out regulatory role in IPO pricing

Mumbai: Amid concerns over high valuations in recent IPOs, Sebi chairman Tuhin Kanta Pandey on Thursday made it clear that the capital markets regulator will not intervene in the aspect.

“We don’t determine what the valuation is. This is in the eyes of the beholder, the investor,” Pandey told reporters on the sidelines of an event here. In the comments that come days after concerns have been raised on Lenskart’s Rs7,200-crore initial public offering being priced at a very high level, Pandey made it clear that Sebi cannot intervene on this aspect, pointing out that the market should freely determine the pricing depending on the opportunities.

In the past as well, valuation concerns have been raised by many stakeholders, especially in cases of new-age or digital companies like Nykaa or Paytm’s IPOs as well. Meanwhile, speaking at the event organised by Excellence Enablers, Pandey asked for companies to be more “authentic” on their environment, social and governance (ESG) commitments. “ESG must be authentic, not a branding exercise,” he said, adding that it must be tied to measurable outcomes, subject to independent assurance, and anchored in genuine board oversight.

Making it clear that ESG is no longer optional, Pandey said a business has to turn regulations into an advantage and not an obligation which needs to be complied with.