SEBI: Tech Companies Will Have To Give This Information Before Public Issue, SEBI Has Prepared A New Rule
The most gritty in this matter is that of SEBI, the regulatory body of the equity market. Now SEBI has decided to tighten its stand to deal with such situations in the future.
SEBI: SEBI in its board meeting can approve amendments to the ICDR Regulations (Issue Of Capital and Disclosure Requirements Regulations). After this, tech-based companies that are preparing to bring IPO will have to explain how the IPO pricing has been fixed in comparison to the price at which they sold the shares in the pre-IPO placement before their IPO launch. Let us tell you that one after the other the shares of many IT companies have collapsed after being listed in the stock market in the last few months. These companies include shares of big brands like Paytm, CarDekho, Zomato, and Policy Bazaar. Investors have suffered huge losses during the last one-and-a-half year due to the IPO coming at an expensive price and then the beating of the shares of these companies in the stock market.
The most gritty in this matter is that of SEBI, the regulatory body of the equity market. Now SEBI has decided to tighten its stand to deal with such situations in the future. According to experts, now before the IPO, SEBI can ask companies to share more information with the regulatory body so that common investors do not get a big shock after listing in the market.
SEBI will take important decisions in the board meeting
Tech-based companies that are preparing to launch IPO will have to explain how the IPO pricing has been decided against the price at which they sold the shares in the pre-IPO placement before their IPO launch. Along with this, all the presentations related to these companies will have to be shared with SEBI which were shown to the investors who bought stakes in the pre-IPO.
Big loss to those investing in IT companies
It is believed that with this move of SEBI, in the future, IT companies will have to make stronger preparations before listing in the stock market and they will have to share clear information with the regulator. During the last one year, IPOs of many IT companies came into the market. But the truth is that investors in all these companies have suffered huge losses. Most of the companies are trading well below their issue price.