SEBI To Increase Disclosure Norms For New Age Companies Planning To Launch IPO After Criticism

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SEBI To Increase Disclosure Norms For New Age Companies Planning To Launch IPO After Criticism

SEBI On New Age Companies IPO: TeTech Based Companies (Tech Based Companies) which are preparing to bring IPO, the strictness of the stock market regulator SEBI is going to increase. To bring these companies IPO, more and more disclosures will have to be made in front of the regulator. SEBI is preparing to increase the disclosure requirements for these companies. The board meeting of SEBI is scheduled to be held on September 30, 2022 in which the final decision will be taken.

Must make all disclosures
SEBI may approve amendments to the ICDR Regulations in its board meeting. After which the tech-based companies that are preparing to bring IPO will have to tell what is the pricing of the IPO as compared to the price at which they sold the shares in the pre-IPO placement before their IPO launch. Also, these companies will have to share with SEBI all the presentations which were shown to the investors who bought stake in the pre-IPO.

SEBI on target after loss to investors
In the year 2021, many new generation companies brought IPO and the investors who invest in the IPO of these companies are facing a lot of loss. Shares of companies like Zomato, Paytm, Policybazaar, Cartrade are trading well below the IPO price on the stock exchange. Due to this SEBI is facing heavy criticism. Recently, SEBI chairperson Madhavi Puri Buch had said that SEBI has no role in deciding the pricing of IPOs coming in the stock market. However, he definitely said that companies will have to make all kinds of disclosures for the proper operation of the capital market.

heavy loss to investors
Last year many internet companies came out with IPOs which are trading well below their issue price. Paytm’s IPO came at a price of Rs 2150 per share. But now the stock is trading at Rs 695. Paytm is trading 67 per cent below the issue price. Car Trade Tech’s IPO came at a price of Rs 1585 per share, which is now trading at Rs 645 i.e. almost 60 percent below the issue price. Zomato’s IPO came at a price of Rs 76, which is currently trading around Rs 65, 18 percent below the IPO price. The issue price of Policy Bazaar was Rs 980 which is now trading at Rs 496 i.e. down 50 per cent.

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