Mumbai (Maharashtra) [India], November 6 : Amid concerns on overvaluations of recent IPO's, Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey on Friday clarified that the market regulator's role is to ensure transparency with full disclosures and not decide the valuations of IPO's. He added that market forces decide valuations.
Pandey added that SEBI's role is to ensure that investors have access to accurate and comprehensive information, allowing markets to determine share prices independently.
"SEBI always thinks of transparency. We don't determine valuations, and it remains on the 'eyes of the beholden' and the investor. We cannot intervene in the markets...and decide what would be the price of the shares. Share prices will be decided by the markets, depending on the opportunities," SEBI chief said.
He added, "SEBI's main role is to ensure disclosures are robust. We have mandated font size and disclosure of comparatives. We are largely focused on information and disclosures; the rest has to be determined by the capital market itself."
On the subject of Business Responsibility and Sustainability Reporting (BRSR), Pandey dismissed the notion that the standards are uniform across the board.
He described India's BRSR framework as "fairly robust" and adapted to local requirements, "They are not one size fits all standards. In fact, India's BRSR regime is fairly robust and there is also a BRSR core."
"So in case of BRSR, we have mandated 1,000 listed entities and in fact more than 1,200 companies are actually doing it. So that means there are more companies voluntarily to give it. And BRSR core where we have got 46 parameters which will be subject to assurance or assessment system. And there is also a gradual rollout of that. I think ESG roadmap is fairly robust and well thought of and also suitable to Indian needs," he added.
BRSR is a sustainability reporting tool for disclosing non-financial performance in areas like Environment, Social, and Governance (ESG).
Asked to respond on many PSUs companies lacking minimum number of independent directors on their Board, the SEBI chief said, "We will only request that the government and the different ministries to appoint the independent directors on time."
Pandey also spoke about SEBI's approach to regulation, emphasizing the need to strike a balance between market development and investor protection.
"Regulations play a constructive role for market development, but if the regulations become too constraining, too overreach, and too micromanaging, then they may become problematic," he said.
He stressed that SEBI aims to maintain a framework that is "progressive" and "balanced." "We have to look after both the sides - the investors and the issuers - move forward in a 'balanced way'," he noted.
Pandey cited the mutual fund industry as an example of how sound regulation can foster both trust and growth.
"Because if the investor protection were not there, the market will also not grow. Take the instance of mutual funds, the mutual fund industry has grown and the investor trust into it also grew because of our regulations," he said.
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