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    Amid IPO fever, Sebi chief says will look into high valuations of public offers

    Synopsis

    Addressing the media after a board meeting that finalised key decisions, Buch said in the wake of the high pricing of IPOs, retail investors will be better off investing after the dust settles down post-debut in the secondary market.

    Amid IPO fever, Sebi chief says will look into high valuations of public offersETMarkets.com
    Amid a flurry of activity in the primary market, Sebi chief Madhabi Puri Buch said the regulator will address the issue of exorbitant valuation of initial public offerings

    Addressing the media after a board meeting that finalised key decisions, Buch said in the wake of the high pricing of IPOs, retail investors will be better off investing after the dust settles down post-debut in the secondary market.

    In the past week, five companies, including Tata Technologies, came out with their IPOs that garnered a record Rs 2.6 lakh crore in application amount.

    On whether Sebi is planning to advise issuers and other market makers to space their issues in a more timely manner and with enough gaps between two issues, Buch said that is not the job of the regulator. "After all, timing the market is not our job".

    "We want to leave issue timing to the market. Else that will be unfair on our part as a Sebi mandated time may not be the best for the issuer and the investors. A company comes to the market to raise money at a time that's best suited for them.

    Among the key decisions that were taken in the board meeting was to reduce the minimum issue size for companies to list on social stock exchanges to Rs 50 lakh from Rs 1 crore in case of issuance of Zero Coupon Zero Principal Instruments (ZCZP).

    The regulator further seeks to regulate online platforms offering fractional ownership of real estate assets. Such platforms will be registered under a framework for small and medium real estate investment trusts.

    On derivatives trading, Buch said it was the regulator's duty to warn them of the risks, but added that the rise in equity derivatives trading did not pose any systemic concerns.

    The surge in trading of derivatives in an historically conservative market environment emerged after stock exchanges changed some options contracts to facilitate quicker and cheaper bets and as online retail trading platforms proliferated.

    Buch said SEBI has told an exchange that feedback from brokers and investors was needed before allowing extension of market hours.

    Sebi aims to introduce same-day settlement of trades on stock exchanges by March 2024 and eventually have real time settlement.

    Already, the watchdog reduced the settlement timelines to as short as one day.

    "Sebi wants the T+0 settlement norm to be in place from March-end 2024 and T plus instantaneous settlement 12 months from thereon," Buch told media.

    T+0 refers to the same-day settlement of trades and instantaneous settlement means settling the transactions on a real time basis.

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    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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