Mumbai: Sebi chief U.K.Sinha asked the business community to introspect why they have not been able to raise money through IPOs and suggested that they study the scheme whereby 60 small and medium enterprises (SMEs) raised Rs 600 crore in one and a half years and their total market capitalisation increased from a valuation of Rs 2,200 crore to $1 billion. He also suggested they look at the institutional trading platform (ITP) where a company can list without going through an IPO.
He said in the last three years Rs 60,000 crore worth of intentions to raise capital were junked. Excuses like markets are not conducive do not hold water and issuers should introspect on their pricing. He pointed out that of the 12-13 issues that came to the market recently more than two-third were trading below the issue price and even after adjusting with the general decline of the index, two thirds of the issues are trading at below the issue price.
Making a passionate plea on behalf of minority shareholders Mr Sinha said “We came across schemes of arrangement that kept minority shareholders in the dark so we insisted that they come to us first. We insisted on the rule of law and we were accused of activism but some of the largest hedge funds have complimented us on this.”
Answering questions later, Mr Sinha said he would not budge on the issue of independent directors, auditors commissions, etc., that the corporates did not like in the new Companies Act. When told about the difficulty in getting independent directors, he said he could not believe that in a population of 25 crore they could not find 10,000 independent directors for 5,000 listed companies of which only 1,000 were actively traded.
