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Mumbai: SEBI Chairman Tuhin Kant Pandey said that the job of the regulator is not to decide the valuation of companies. He said, “We don't decide what the valuation should be. It depends on the investor's vision.”
The SEBI chief’s statement comes at a time when the discussion of high valuation in the market for Lenskart's IPO of Rs 7,200 crore has intensified. Pandey said that the market should have the freedom to assess opportunities and risks according to their own preferences.
Pandey reminded that questions have been raised about the valuation of IPOs of many new age companies in the past. For instance, even during the IPOs of Nykaa and Paytm, concerns were raised over the valuation. However, SEBI has always believed that it is the job of market participants to decide the valuation.
Speaking at the event, Pandey warned companies that Environment Social Governance (ESG) reporting should not be a mere 'branding exercise'. He said that ESG should be authentic, it should be related to measurable results and should be under the actual supervision of the Board. Along with this, he suggested that companies form an ethics committee, which should work as a warning system at the initial level.
The SEBI chief said that the time has come for companies to adopt institutional ethics. He said that the Board should track the cultural health of its company as seriously as they do to the revenue and return ratio.
The SEBI chairman said that SEBI will review several rules in the coming time to make them easy, rational, relevant and clear. Along with this, he said that the objective of the regulator is to promote innovation and responsibility in the market while avoiding overreach.
Pandey also said that directors and senior management of companies must now strengthen their understanding in new areas of new age risks such as cyber risk, data ethics, behavioral science and sustainability. Along with this, he said that today's complex market needs not only formal monitoring, but informed judgment.
(Disclaimer: This article is only meant to provide information. TV9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, gold, silver and crypto assets.)
