IPO information must explain business drivers: Sebi

Mumbai: Issuers must disclose capital structure clearly explaining past capital-raising, preferential allotments and changes in control close to the initial public offering (IPO), Securities and Exchange Board of India (Sebi) chairman Tuhin Kanta Pandey said on Thursday. "We expect greater business model clarity, with transparent revenue and cost drivers," he said at an Association of Investment Bankers of India event. Management discussion and analysis should move beyond narration and explain the internal and external drivers of performance, the Sebi chief said. "Our inspections show that due diligence is not always independent and, at times, relies on issuer undertakings. Projections, especially for working capital and capex, must be independently verified, and backup papers must be maintained for all material statements. Basic checks, such as site visits, must be evidenced with complete reports and photographs with geo-tagging and time-stamps," Pandey said. India is globally ranked first in terms of number of IPOs and third in terms of value, with 311 IPOs raising ₹1.7 lakh crore in the first nine months of this financial year. The regulator's internal estimates indicate a strong fundraising pipeline and issuers could raise ₹1.5 lakh crore. The Sebi chairman also raised concerns about the mismatch seen between valuations in the unlisted shares market and the prices discovered during the IPO book-building process.“There is of course an issue when it comes to listing, there is a mismatch between what is the pricing they have done on the unlisted side and what are the prices which are discovered when the book is built,” Pandey said. “Prelisting and post-listing are different worlds. There are a large number of unlisted companies, and how we deal with this is something we need to explore, in consultation with the ministry of corporate affairs.” In a separate development, Pandey said the regulator has agreed in-principle to the National Stock Exchange’s settlement application in relation to the co-location case. “That (settlement application) is in the process of our different committees. But, in principle, we agree with the settlement, he said. In June 2025, the NSE had filed two applications with Sebi to settle the long-standing co-location and dark fibre cases by offering to pay a total amount of more than Rs 1,300 crore. At a press conference last week, the Sebi chairman had said that the regulator is likely to issue a no-objection certificate for the NSE IPO by the end of the month.