The assessment of a new IPO or equity is done through Key Performance Indicators (KPI). Market regulator SEBI plans to change the framework of this Key Performance Indicators. SEBI launched this parameter about three years ago. And now the regulator aims to expand its scope. It plans to increase the disclosure period of old transactions to three years. Implementation of this rule means that now companies will have to provide information about the transactions of the last three years.
This process of fine-tuning companies' disclosures also takes into account financial and operational parameters. Operational parameters here include the long-term sustainability of the business and factors that drive growth in its financial performance.
Moneycontrol has learnt from some sources that SEBI wants every KPI to be approved by the company’s audit committee and certified professionals.
In the regulatory framework that is in place till now, companies have to provide information about the transactions of the last 18 months. Along with this, an undertaking has to be taken from the independent directors that the price band of the IPO is reasonable.
A person aware of the matter said, "KPI disclosure was implemented for New Age companies and startups three years ago. Now SEBI has accumulated so much data that it can be analyzed and the regulatory framework can be strengthened."
