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With IPOs worth Rs 60,000 crore getting scrapped in last three years, Sebi chief U K Sinha today said market sentiment is mainly driven by company promoters' decisions and rules alone can't change their minds.
"You see sentiment in the primary market is guided primarily by the decision of promoters to raise capital because they want to raise capital because they want to make investments," Sinha said here.
He was speaking to reporters after Sebi board meeting where many measures were approved to boost the primary market.
"Let me remind you that in the last three years almost Rs 60,000 crore worth of draft red herring prospectus proposals which were filed with Sebi they were either withdrawn or lapse. That had nothing to do with Sebi rules.
"It is because those promoters at one stage wanted to raise money, they wanted to make investments and mid way they decided that they are not going to do it. So Sebi's rules can't tackle that mentality," Sinha said.
The Sebi chairman also said that the board appreciated measures taken by the regulator during the general elections to ring fence the markets from volatile movements.
"I must tell you that the board took note of the measures taken by Sebi in consultation with RBI and they appreciated, the board applauded the measures taken by Sebi.
"I am very proud to narrate this to you and they (board) appreciated all measures taken by Sebi to ensure that there is no volatility at the time of the election results," he noted.
To a query on whether Sebi came across any instance of manipulation during that time, Sinha said one case was detected and the matter was being probed.
"One case which the media has already reported where we noted something which was not quite usual going by the past practice or trend of that particular investor.
"So we have given them a notice and that matter is being examined. So far we have not found anything wrong but the matter is not closed. We are examining that," he said.
The case involves an individual who was found to have traded in unusually huge quantity.
Responding to a query on ensuring conversion of all physical shares into dematerialised form, the Sebi chief said the matter is still being examined and a decision is yet to be taken.
Sinha declined to comment on recommendations of FSLRC (Financial Sector Legislative Reforms Commission). RBI governor Raghuram Rajan recently criticised certain FSLRC recommendations, including those involving merger of regulators and putting in place oversight bodies for various financial sector watchdogs.
