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Sebi may widen disclosures on IPO pricing

by WorldFinance
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The Securities and Exchange Board of India (Sebi) may mandate more disclosures with regard to pricing of public share sales in its upcoming board meeting on September 30. The regulator may ask companies to divulge the rationale for the difference in pricing of shares sold to private equity investors and that for the initial public offering (IPO).

“If the issue price in an IPO is high, and a stock slips on listing, investors do get prejudiced. Hence, Sebi is thinking of seeking disclosures on how the issue price has been arrived at, including looking at past transactions in the shares of such companies,” said Saurabh Tiwari, partner, DSK Legal.

The basis of issue price has been the subject of debate after new-age companies such as Paytm and Zomato slid sharply over their issue price post listing.

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