Credibility of primary markets at stake: Sebi

Market regulator Sebi today cautioned the credibility of primary markets is at stake as retail investors on many occasions are left clueless about their returns as scores of stocks are trading way below listing price.

It also said investment bankers need to introspect their role on the price discovery mechanism for these markets.

"The credibility of our markets is at stake. The i-bankersneed 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 told a summit of i-bankers here.

Stating that many of the newly-listed stocks are trading below listing price, Sinha said: "There is something wrong if two-thirds of the issues between 2009 and 2012 are trading below market decline levels. Call auction data show that volatility on opening day have reduced considerably.

"Sebi has noticed in some IPOs that due diligence wasn't done properly. Assets mentioned were missing or weren't even mentioned," he said.

ALSO READ

South Indian Bank Q4 net profit rises 26%

Muthoot Capital Services net profit up 40%

Simplification can cap Saradha group-type chit fund, Ponzi scheme cons: Institute of Cost Accountants

Reliance Communications hikes mobile call rates by up to 30%