Sebi takes more stringent approach towards initial public offerings

Regulator insisting firms identify promoter entities wherever possible, say investment bankers

The Securities and Exchange Board of India (Sebi) has pivoted towards a more stringent approach towards initial public offerings (IPOs). This shift in fulcrum follows a meltdown in shares of new-age technology (tech) companies that saw over a Rs 3-trillion wipeout of investor wealth.

According to investment bankers and other industry players, the capital markets regulator has insisted companies identify promoter entities wherever possible.

Additionally, it has been returning draft red herring prospectuses (DRHPs) with inadequate filings and keeping a tight vigil on company comments in the run-up to their IPOs.

Some practices are a departure from the past and