Sebi moots new disclosure framework for IPOs of loss-making companies
Zee News
Such firms generally remain loss-making for a longer period before achieving break-even as they opt for ways to gain scale of operations rather than profits in the initial years.
New Delhi: Markets watchdog Sebi on Friday proposed that loss-making new age technology companies planning to list their shares should make disclosures about their key performance indicators considered for arriving at the basis of issue price in offer documents.
Besides, such companies should make disclosures about their valuations based on issuance of new shares and acquisition of shares in the past 18 months before filing draft offer documents, according to a consultation paper.
The move comes against the backdrop of many new age companies, that do not have a track record of having an operating profit at least in the preceding three years, tapping the Initial Public Offering (IPO) route to raise funds.
Such firms generally remain loss-making for a longer period before achieving break-even as they opt for ways to gain scale of operations rather than profits in the initial years.
The Securities and Exchange Board of India (Sebi) has sought comments from the public on the consultation paper till March 5.
