Securities and Exchange Board of India (Sebi) Chairman UK Sinha on December 15, said the market regulator’s focus on raising disclosure norms, along with a robust economy, has benefited the initial public offer (IPO) market in the country. Sinha was addressing the Association of Investment Bankers of India (AIBI) Summit in Mumbai.
Speaking about the swift clearance of IPO proposals, Sinha further said that at present, 11 draft red herring prospectuses (DRHPs) are pending with Sebi for approval and none of them is more than two months old. “The one case which is more than two months old requires approval from another judicial body,” Sinha said.
Sinha also expressed concerns about IPO issues trading below the issue price. “If one looks at the numbers prior to 2013, more than two-thirds of the issues were trading below the issue price. As of today, 17 of the 25 issues are trading above issue price. However, the remaining eight issues when they came up were oversubscribed by a good margin,” he said.
On being asked about the listing of domestic stock exchanges in the overseas market, Sinha said: “An exchange in India as per our regulations cannot list outside India.”
Sinha further said that several NRIs are looking at India to list their companies rather than going to other parts of the world. He said NRIs are looking at India as a destination for IPOs because of the robust economy and transparency of the regulatory system.
Sinha said that the SME funding experiment has been reasonably successful and around 200 companies have been listed so far in either NSE or BSE, and another 200 companies are to be listed.
However, he expressed disappointment about not being able to replicate the same success with institutional trading platforms (ITP) for start-ups despite relaxed norms.
Regarding the review of norms for independent directors, Sinha said there is no need to review such norms. “The appointment, sacking and role of independent directors is prescribed in the Companies Act as well as Sebi regulations. Sebi regulations are more stringent than those under the Companies Act. There is always a need to review, but I don’t see any compelling reason to review them at this stage,” Sinha said.
Source: The Financial Express
