Market, not SEBI, decides IPO valuations, says Chairman Tuhin Kanta Pandey

Mumbai, Nov 6 (IANS) Amid growing concerns over the steep pricing of recent initial public offerings (IPOs), Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey on Thursday clarified that the market regulator has no role in determining valuations of public issues.

"We don’t determine what the valuation is. This is in the eyes of the beholder — the investor," Pandey told reporters on the sidelines of an event.

The SEBI chief's remarks came days after concerns were raised over eyewear retailer Lenskart’s proposed Rs 7,200 crore IPO being priced at what some analysts consider a high valuation.

Pandey asserted that the regulator cannot interfere in IPO pricing, stressing that market forces should be allowed to freely determine valuations based on perceived opportunities.

Earlier in a separate event, on the futures and options (F&O) segment, Pandey said that the SEBI is taking a calibrated approach to any regulatory changes and ruled out the possibility of halting weekly expiries.

"We cannot just shut down weekly F&O expiries. Many market participants are actively using it," he said while addressing the event in Mumbai.

He added that the SEBI is closely studying trading behaviour in the derivatives segment and analysing large datasets to assess market impact. The findings will be released for public consultation before any new measures are rolled out.

Pandey also pointed out that several reforms in the derivatives market have already been announced but have yet to come into effect. His comments follow recent reports suggesting that the SEBI may be looking to curb weekly expiries to promote cash market activity and reduce speculative trading.

The SEBI chief’s remarks come amid heightened debate over high IPO valuations and the surge in retail participation in the F&O segment, which market observers warn could increase volatility and speculative risks.

--IANS

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