SEBI does not decide IPO valuations: Chairman Tuhin Kanta Pandey
He spoke amid growing concerns over the steep pricing of recent IPOs
The Securities and Exchange Board of India (SEBI) has clarified that it has no role in determining valuations of public issues.
On the sidelines of an event, Tuhin Kanta Pandey, Chairman, SEBI, stated, “We don’t determine what the valuation is. This is in the eyes of the beholder – the investor.”
The remarks came days after concerns were raised by analysts over eyewear retailer Lenskart’s proposed Rs.7,200 crore initial public offering (IPO) priced at a high valuation.
The SEBI chief explained that the regulator does not interfere in IPO pricing and that market forces must be allowed to determine valuations on perceived opportunities freely.
Earlier, Pandey had delved on the futures and options (F&O) segment, expressing that the SEBI was taking a calibrated approach to any regulatory changes and ruled out the possibility of halting weekly expiries.
While addressing an event in Mumbai, the CEO added, “We cannot just shut down weekly F&O expiries. Many market participants are actively using it.”
Meanwhile, SEBI is scrutinizing trading behavior in the derivatives segment and analyzing large datasets to assess market impact. The findings will be released for public consultation before any new measures are rolled out.
The chief apprised that several reforms in the derivatives market had been announced but were yet to come into effect.
Recent reports had suggested that SEBI might curb weekly expiries to promote cash market activity and reduce speculative trading. Thus, Pandey’s remarks were made amid heightened debate over high IPO valuations and the surge in retail participation in the F&O segment.
Observers warned that it could increase volatility and speculative risks in the securities market.