SEBI will not intervene on IPO valuation concerns, says Pandey

Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey on Thursday clarified that the capital markets regulator will not interfere in issues related to high valuations of companies coming out with initial public offerings (IPOs).“We don’t determine what the valuation is. This is in the eyes of the beholder  the investor,” Pandey stated on the sidelines of an event in the national capital.His comments come amid rising concerns over the lofty valuations of recent IPOs, including Lenskart’s Rs7,200 crore issue, which some market participants have called “overpriced.” Pandey emphasized that market forces should be allowed to determine valuations based on investor perception and opportunity.
“In a free market, pricing should reflect investor sentiment and opportunity. SEBI cannot intervene in that aspect,” he said, reaffirming the regulator’s stance on maintaining a light touch when it comes to valuation assessments.Over the past few years, valuation concerns have frequently surfaced during high-profile IPOs, especially those of new-age technology companies like Nykaa and Paytm, which witnessed significant volatility post-listing.
At the event organised by Excellence Enablers, Pandey also stressed the need for companies to be more genuine in their approach to Environment, Social, and Governance (ESG) goals. “ESG must be authentic, not a branding exercise,” he stated, urging firms to ensure that their ESG claims are tied to measurable outcomes, independently verified, and closely overseen by their boards.Pandey added that businesses should treat regulatory frameworks as opportunities to strengthen governance rather than mere compliance obligations. “Companies must institutionalise ethics. Boards should adopt governance scorecards that track cultural health with the same seriousness as financial performance,” Pandey noted.
Highlighting evolving corporate risks, Pandey said boards must oversee not only financial risks but also emerging concerns like data ethics, cyber resilience, and algorithmic fairness. He suggested companies consider setting up standing ethics committees at the board level to serve as early warning systems.From a regulatory standpoint, Pandey underscored SEBI’s intent to avoid “regulatory overreach” while promoting innovation and accountability. “We will review several regulations in consultation with industry and investors to simplify, rationalise, and contextualise them,” he said.He also urged directors and senior management to strengthen their expertise in critical areas such as cyber risk, behavioural science, data ethics, and sustainability. “The complexity of today’s market demands informed judgment, not ceremonial oversight,” Pandey noted.

(Business Correspondent)