SEBI Chief Allays IPO Valuation Worries, Advocates Genuine ESG Governance

Mumbai, November 6, 2025: SEBI Chairman Tuhin Kanta Pandey clarified that the regulator does not participate in determining IPO valuations. He further stated that pricing should be guided by market forces and investor perception, not regulatory intervention.

No Regulatory Role in IPO Valuations

During a media interaction in Mumbai on Thursday, SEBI Chairman Tuhin Kanta Pandey clarified, “It is not our job to tell how the valuation is. The one who actually judges it is the investor.” His remarks came amid discussions around Lenskart’s ₹7,200 crore IPO and its relatively high pricing. Pandey emphasized that SEBI’s focus is on ensuring transparency and fairness in disclosures, rather than intervening in valuation methods. He also recalled past instances, such as the digital IPOs of Nykaa and Paytm, which sparked significant market debates over pricing.

Emphasis on Genuine ESG Commitments

At the event put forward by Excellence Enablers, Pandey had emphasized the need for genuine environmental, social, and governance commitments. No company, he warned, should promote itself through ESG. Rather, it has to be treated as one of the Board of Directors’ corporate governance fundamentals. “ESG has to be real, not just a branding exercise,” he said while urging companies to make their ESG indicators measurable, verifiable, and monitored by the board. Besides this, he held the companies responsible for the implementation of corporate social responsibility in their management. He advised them to employ the governance scorecard not only for measuring the financial results but also the corporate culture health.

Strengthening Board Oversight and Ethical Governance

Pandey argued that corporations should not focus only on the traditional areas of finance in terms of business risk. Besides these, new risks include data ethics, cyber resilience, and algorithmic fairness. Speaking to governance and ethical issues, he advised the board to set up independent ethics committees whose activities, among other things, would be to anticipate the problems and then report them to the board.

Regulatory Simplification and Focus on Innovation

On the future course of action by SEBI, Pandey said that besides simplification and modernization of the existing frameworks, the regulator, through consultation, also proposes to take into consideration the views of the industry players:

He also urged corporate directors to get more familiar with issues such as sustainability, behavioral science, and the management of cyber risk. He also noted that today’s complex business environment requires “sound judgment rather than ceremonial oversight.”

Regulate and Balance for Future Growth

Concluding his talk, Pandey reiterated that a regulator’s role, in creating the right business environment, where transparency and fair business practices are in tune with allowing changes and new ideas, as one of the SEBI concerns. The head of the regulatory body underlined that his first concern would still be providing the necessary environment for real ESG adoption and also establishing reliable governance mechanisms that will increase not only investors’ confidence but also market stability in the long run.

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