India’s markets regulator SEBI has emphasized the need for sharper disclosures in public offerings. Chairperson Tuhin Kanta Pandey highlighted that issuers must provide clearer details on valuation, risk factors, objectives of the issue, and use of proceeds. The move aims to strengthen investor confidence and ensure accountability in capital markets.
In a significant push for transparency, the Securities and Exchange Board of India (SEBI) has called for sharper and more detailed disclosures in public offerings. SEBI Chairperson Tuhin Kanta Pandey underscored that issuers must go beyond generic statements and provide clear, comprehensive information on valuation, risk factors, objectives of the issue, and the use of proceeds.
Key Highlights
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Valuation clarity: Companies must justify their pricing with transparent metrics, ensuring investors understand how valuations are derived.
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Risk factors: Issuers should disclose both financial and non-financial risks, including potential conflicts of interest, to help investors make informed decisions.
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Objectives of the issue: SEBI stressed that fundraising goals must be explicitly stated, avoiding vague or broad language.
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Use of proceeds: Companies must detail how raised capital will be deployed, whether for expansion, debt repayment, or other strategic purposes.
This directive comes amid rising concerns about opaque disclosures in IPOs and capital raising, where investors often struggle to assess the true risks and benefits. By tightening disclosure norms, SEBI aims to enhance accountability, reduce information asymmetry, and strengthen investor protection.
The regulator has also been reviewing its Issue of Capital and Disclosure Requirements (ICDR) framework, consolidating circulars and updating guidelines to align with evolving market practices. Experts believe these measures will not only improve transparency but also boost confidence in India’s capital markets, making them more attractive to domestic and global investors.
As SEBI continues to refine its regulatory framework, issuers will need to adapt quickly, ensuring that disclosures are not just compliant but genuinely informative.
Sources: Reuters, SEBI Regulations, KS&K Newsletter