Companies to soon face tighter KPI disclosure norms as SEBI mulls review of rules

Views: 137

Home Market News Companies to soon face tighter KPI disclosure norms as SEBI mulls review of rules

Sources familiar with the development say that the aim of the capital market watchdog is to strengthen the KPI disclosure framework that plays an important role especially in the initial public offers (IPOs) of digital majors and start-ups that typically do not have a proven track record in terms of profitability.

By Moneycontrol News November 29, 2024, 11:58:21 PM IST (Updated)

The Securities and Exchange Board of India (SEBI) is planning a review of the KPI – Key Performance Indicators – a framework that was put in place two years back for public issues of new-age companies.

Sources familiar with the development say that the aim of the capital market watchdog is to strengthen the KPI disclosure framework that plays an important role especially in the initial public offers (IPOs) of digital majors and start-ups that typically do not have a proven track record in terms of profitability.

This assumes significance as the regulatory initiative comes a little over two years after the capital markets watchdog introduced the KPI framework. The KPI disclosure framework was in response to a slew of IPO of digital majors or start-ups like Zomato, Nykaa and Paytm among others.

Also Read: SEBI bats for NSE & BSE to be backup trading platforms for each other

“It has been two years since the KPI disclosure framework was introduced and based on the experience and learnings, SEBI wants to review and strengthen the rules. It has already reached out to a few industry bodies for feedback and suggestions,” said a person familiar with the development.

“SEBI is not happy with the current level of disclosures and wants investors to get access to better disclosures especially since many digital companies are looking to list. The absence of profitability and a huge fall in valuations of many marquee start-ups has also necessitated a review to ensure proper disclosures are made,” he added.

In 2022, SEBI introduced the KPI framework that made it mandatory for IPO-bound companies to disclose details of past transactions and fundraising, including the price at which shares were sold 18 months prior to the IPO.

Also Read: Angel One … Read More