Sebi does not need to ration number of IPOs: U K Sinha

He said that such limits are not imposed so that the secondary market can grow

With the country's primary market seeing a record uptrend in four years, Sebi chairman U K Sinha today said the market regulator does not need to "ration" the number of initial public offers (IPOs).

"There are certain countries that do some sort of a rationing for IPOs and I think they have disastrous consequences. India does not do that," Sinha told reporters here on the sidelines of a corporate governance event organised by industry body CII.

"We don't impose such limits on IPOs so that the secondary market can grow," he said, adding that companies go for public issues based on macro economic conditions.

Recognising that primary market is in an upbeat mood, Sinha observed that the number of IPOs this fiscal has already surpassed those in the previous years.

"Between 2011-13, Rs 16,000 crore worth of draft red herring prospectus were filed with Sebi and then they lapsed. Today, that is not the case. Today larger and larger number of corporates are coming," he said.

"Our job is to ensure that correct disclosures are made and I think we have deep vibrant market and all FPIs and large funds are registered so we don't need rationing of IPOs," he noted.

Since the beginning of 2015, as many as 41 companies have filed draft documents with Sebi to float IPOs. In the same period, the market watchdog gave approval to 34 firms to launch their initial share sale plans, some of which were pending from previous year.

This year, at least 18 companies have so far launched IPOs and have collectively raised over Rs 12,000 crore, making it the best in four years in terms of fund raising through initial share-sale programmes.

In comparison, six IPOs had hit the market in the entire 2014 and together garnered just Rs 1,261 crore, while three firms had launched their public issues in 2013 to mobilise Rs 1,284 crore.

On the issue of remuneration paid to the top management in the companies, Sinha said that the market regulator has covered substantial ground on compensation but "we can't be complacent".