Markets regulator SEBI will step in wherever there is “serious misrepresentation” or a clear breach of regulatory requirements in initial public offerings (IPOs), its chairman Tuhin Kanta Pandey said on Thursday.
Speaking at the 14th annual convention of the Association of Investment Bankers of India (AIBI), Pandey said the regulator’s priority is to improve information accessibility, enhance investor comprehension, and encourage more informed participation by investors in the IPO process.
“However, we will intervene wherever there is serious misrepresentation or a clear breach of regulatory requirements,” he said .
“We are undertaking a comprehensive review of SEBI regulations, including LODR, to eliminate redundancy, ambiguity, and outdated constructs,” he added.
Highlighting the role of merchant bankers as “gatekeepers of transparency”, the SEBI chief said inspections have revealed recurring disclosure gaps that reduce transparency and lengthen fund-raising timelines due to repeated regulatory queries.
He flagged key areas such as risk factors, valuation rationale, objects of the issue and use of proceeds where disclosures need to be sharper.
Disclosures on capital structure must clearly explain past capital raisings, preferential allotments and changes in control, especially close to the IPO, he added.
Pandey also said SEBI expects greater clarity on business models, including transparent revenue and cost drivers, and a more analytical management discussion and analysis section that explains internal and external performance drivers, rather than being merely narrative.
Noting that due diligence is not always independent and sometimes relies excessively on issuer undertakings, he said projections, particularly for working capital and capital expenditure, must be independently verified and supported by proper documentation.
Even basic checks such as site visits should be evidenced with detailed reports, photographs with geo-tagging and time-stamps, he added.
The remarks come at a time when India’s primary markets have seen a surge in activity, with the country ranking among the top globally in terms of number of IPOs.
SEBI, he said, is also undertaking a comprehensive review of its regulations, including listing norms, to eliminate redundancy and outdated provisions.
The regulator’s focus, Pandey said, is to balance faster processes and ease of doing business with higher trust and stronger investor protection in the capital markets .