SEBI Exploring Guardrails on IPO and Corporate Valuations to Safeguard Retail Investors

Mumbai, November 7, 2025: The Securities and Exchange Board of India (SEBI) is exploring multiple ways to boost guardrails around IPO valuations. This step is initiated to protect retail investors.

SEBI’s Whole-Time Member Kamlesh Varshney said that, even as it maintains that valuation is never a regulatory gap. Kamlesh Varshney took part in the 10th edition of the corporate governance summit, which happened in Mumbai. In the summit, he addressed that though the market regulator has moved away from controlling capital issue pricing, there is a need to ensure that valuations done by the anchor investors are taking place in an effective and transparent way.

Vrashney also emphasised that he is not saying it as an absolute regulatory gap, but measures have to be taken to keep a check on how this can further put guardrails. He said, We have seen many IPOs where the retail investors are raising questions about the valuations.

Concerns Over IPO Valuations

Recently, high-profile IPOs such as Nykaa, Paytm, and Lenskart have drawn scrutiny for their steep pricing. Varshney said to SEBI that the current stance of staying away from valuations led by anchors is appropriate. Still, he highlighted the need for a mechanism to ensure that it is a fair and robust valuation.

Focus on Corporate Arrangements

Another prime area of concern was pointed out by Varshney, which is the valuation that is happening during the corporate announcements. These announcements include mergers or share swaps. This is where the minority shareholders take space to raise a complaint of inflated promoter valuations, which lead to unfair swap ratios.

He addressed that, Guidelines for valuations could be developed in coordination with IBBI. He reassured that the regulator will not be involved in determining the IPO pricing. Likewise, he underscored SEBI ‘s commitment to enhancing transparency and fairness in the practice in terms of valuation. This should be taken care of across both primary and corporate restricting markets to protect investor interest.

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