JOIN USSebi on Wednesday suggested investment bankers (I-bankers) to introspect their role on the price discovery mechanism in primary markets even as retail investors are more often clueless over their returns as scores of stocks are trading way below the listing price.
“The very credibility of our markets is at stake and I-bankers need to introspect whether their behaviour challenges the entire merit-based versus price discovery mechanism or not. We need some amount of sanity in pricing and IPO disclosures,” Sebi Chairman U K Sinha said here while inaugurating a summit of i-bankers.
Sinha pointed out that many of the newly listed stocks are trading below listing price saying, “There is something wrong if two-thirds of the issues between 2009 and 2012 are trading below market decline levels. Call auction data shows that volatility on opening day has reduced considerably.”
Sebi, he continued, noticed in some IPOs that due diligence wasn’t done. “Assets mentioned were either missing or weren’t even mentioned,” he added.