Sebi asks merchant bankers for ‘realistic’ IPO valuations
Times of India | 28 August 2025
Kolkata: Capital markets regulator Sebi has advised merchant bankers to be "realistic" while setting valuations of large IPOs.
Speaking at an event organised by Merchants' Chamber of Commerce & Industry (MCCI) in Kolkata on Tuesday, Sebi wholetime member Kamlesh Chandra Varshney said valuation of large IPOs is important so that retail investors don't lose trust in capital markets.
Varshney observed that some companies make high valuations and then their prices go down after listing. | Gold Rates Today in Kolkata | Silver Rates Today in KolkataHe said: "We at Sebi don't control pricing. That is determined by anchor investors, including mutual funds, and merchant bankers. Where do they get their money? Most of it is from retail investors.
""If mutual funds are investing in IPOs at high valuations, retail investors lose money in the future. That is one aspect we tell merchant bankers and anchor investors to be careful about," he added.
Varshney further said Sebi has been organising training sessions for merchant bankers who prepare draft red herring prospectuses (DRHPs) for companies that want to go public.
"We will be training merchant bankers on what we find in their DRHPs and things that have not been disclosed," Varshney said.
As part of this approach, he suggested the retail quota be kept at 35% in line with existing regulations.