SEBI Strict On IPO Of Tech Companies

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 coming of Initial Public Offering (IPO) at expensive prices and the beating of shares of these companies in the stock market.

The most gritty in this matter is the equity market regulatory body SEBI. Now Securities and Exchange Board of India SEBI has decided to tighten its stand to deal with such a situation in the future. According to experts, now before the IPO, SEBI may 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. It is believed that a decision on this will be taken by SEBI in its meeting on September 30.

SEBI may approve amendments to the ICDR Regulations (Issue of Capital and Disclosure Requirements Regulations) in its board meeting. After this, tech-based companies that are preparing to launch an IPO will have to explain how the IPO has been priced in comparison to 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. 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. So that investors do not suffer a big loss after listing.

During the last year, the 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.