‘Market Must Decide What’s Fair’: SEBI Chief Bats For Investor-Driven Valuations, Calls For Authentic ESG & Stronger Board Ethics

Mumbai: Against the backdrop of a raging debate on stretched valuations in recent IPOs, SEBI Chairman Tuhin Kanta Pandey said on Wednesday the regulator would not interfere with how firms are priced. He outlined valuation as fundamentally a market-led exercise, which gets determined by investor sentiment and opportunity perception.

Value Lies with the Market, Not the Regulator

Speaking to reporters in Mumbai, Pandey said, “We don't determine what the valuation is. It lies in the eyes of the beholder - the investor.” His comments come at a time when there are growing concerns about the aggressive pricing of new-age IPOs, which include Lenskart's ₹7,200-crore issue, believed by some analysts to be overvalued.

Pandey said SEBI ensures transparency, proper disclosures, and protection of investors but doesn't interfere with pricing matters. "The market must freely determine the valuations depending upon the opportunities it perceives," he said. There were similar valuation concerns when Nykaa and Paytm-both digital-first companies-had come up with IPOs and saw post-listing corrections.

‘ESG Must Be Authentic, Not a Branding Exercise’

Addressing a gathering organised by Excellence Enablers, Pandey spoke on ESG issues and asked corporates to make ESG “real” rather than using it as a marketing tool. “ESG needs to be attached to quantifiable results assured by a third party with real board involvement,” he added, saying ESG is no longer a choice but an opportunity for strategic advantage in responsible business.

Institutionalising Ethics and Strengthening Boards

The head of SEBI called for the institutionalisation of ethics by the boards, treating corporate culture as an asset to be monitored as much as revenue or profit margins. He encouraged the companies to adopt governance scorecards to track the cultural health through employee feedback, whistleblower trends, and ethical behaviour.

Pandey further suggested the formation of board-level ethics committees to act as an early warning system. He said directors must enhance their competence in emerging areas such as cybersecurity, data ethics, behavioural science, and sustainability, adding that today's complex markets require "informed judgment, not ceremonial oversight."

Balancing Oversight with Innovation

On the regulatory front, Pandey said there is a need to avoid regulatory overreach by promoting innovation and accountability. SEBI, he said, would review and simplify many existing regulations in consultation with industry and investors in order to ensure that regulations remain clear, contextual, and forward-looking.