SEBI (Securities and Exchange Board of India) is demanding verified, high-quality data from companies and investment bankers during the IPO process. By requiring hard proof on valuations and fund usage, it aims to better inform investors and speed up application approvals.
The telecom regulator TRAI (Telecom Regulatory Authority of India) is pushing for legal reforms to stop companies from dodging penalties. Currently, low fines and long court delays allow telcos to bypass accountability. They want massive increase in fines, want companies to deposit 50% of fines upfront before challenging in Courts and easier collection process (similar to Income Tax). These changes are driven by the need to resolve stuck fines (like a ₹150 crore spam penalty) and to modernize operations through expert hiring and consumer protection funds.
OUR VIEW:
SEBI and TRAI are two completely different regulators, operating in different fields: one protecting the consumers in the securities market, and the other in the telecommunications sector. But one thing is clear: Both regulators are increasingly focusing on consumer protection.
SEBI's move to require accurate data reflects market sentiment, as recent IPOs have failed to deliver strong returns post-listing. Higher scrutiny by merchant bankers also reflects a closer reading of SEBI regulations and an increased responsibility on their part. The move is also aimed at reducing the time SEBI takes to scrutinise the draft red herring prospectus and enabling companies to list on stock exchanges earlier. The heightened role of the merchant bankers can be linked to our commentary last week on how India is not prepared to remove "naming and shaming" of gatekeepers who are non-compliant. The merchant banker is supposed to verify compliance with these legal requirements. SEBI has finally noticed where merchant bankers are not pushing the envelope and is therefore taking steps.
TRAI has also highlighted how low penalties make it more cost-effective for telecom companies to remain non-compliant with the law. The move to make it more costly to be non-compliant could jolt the telecom companies and will protect consumers. With the Parliament rationalising offences through the Jan Vishwas Acts over the last few years, amending the TRAI Act, and increasing penalties, will be a welcome move
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Link - https://www.outlookmoney.com/amp/story/invest/equity/sebi-chairman-highlights-need-for-sharper-disclosures-for-ipo-bound-companies
Link - https://m.economictimes.com/industry/telecom/telecom-news/trai-seeks-more-powers-to-stop-telcos-from-dodging-fines/amp_articleshow/126512466.cms
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