Sebi chairperson Madhabi Puri Buch on Tuesday said the capital markets regulator has no business to suggest pricing of the initial share sale of new-age technology companies.
She, however, quickly added that there needs to be more disclosures by companies on how valuations have changed between a pre-initial public offering (IPO) placement and the price which is being asked for in the issue.
“A lot has been said about the pricing of IPOs of tech companies… at what price you choose to do the IPO is your business, we have no business to suggest otherwise,†Buch said addressing the annual Capital Markets summit organised by industry lobby Ficci here. Buch, the career-banker-turned-regulator and the first woman chair of Sebi, explained through an example of a company selling shares to investors at Rs 100 and then asking for Rs 450 in an IPO within a few months.
She said a company is free to ask for a higher price, but needs to disclose what happened in the intervening period which justifies the massive change in the valuation.
