Anybody who says Sebi is deciding on pricing is wrong: U K Sinha
The Securities & Exchange Board of India (Sebi) is not trying to play any role in deciding pricing of an issue; rather it wants investment bankers to play their role honestly, the capital market regulator's chairman U K Sinha said.
In a recent interview, Mr. Sinha stressed that the investment banker was the only person responsible for bringing in an IPO under any law, which was way the regulator was asking for their track record.
In a recent interview, Mr. Sinha said, "Anybody who says Sebi is deciding on pricing is wrong. track record of merchant bankers should be disclosed. If somebody is coming out with a Rs 10 issue for Rs 500, there should be explanations for that."
He further stressed that just 45 of the 127 IPOs issued between 2008/09 and 2011/12 were trading above the issue price, and that the trading of majority of the issues below their issue price indicated that something was wrong.
He blamed investment bankers for the problem, saying they priced IPOs aggressively and investors found them to be a losing proposition, which in turn kept the primary market largely depressed.
Mr. Sinha added that Sebi wanted to empower honest investment bankers to enable them to force companies to disclose right price.