Govt asks ICAI to prepare report on IPO valuation | business | Hindustan Times
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Govt asks ICAI to prepare report on IPO valuation

The Govt directs the apex body of chartered accountants, ICAI, to conduct a study on the initial public offer pricing and suggest ways for protecting the interest of investors.

business Updated: Feb 24, 2008 15:35 IST

In the wake of controversy relating to valuation of public issues, the government has directed the apex body of chartered accountants, ICAI, to conduct a study on the initial public offer pricing and suggest ways for protecting the interest of investors.

"The government has asked the Institute of Chartered Accountants of India (ICAI) to study the issue of IPO valuation and system of stock movements. The ICAI will submit a report on the valuation of IPO in due course," Corporate Affairs Minister Prem Chand Gupta told PTI.

"The ICAI study would take into account the practice followed in other countries as well as India and suggest ways for dealing with it," he said, adding that the apex body would also advise the government on making the whole process of IPO valuation more transparent.

When contacted, the ICAI President Ved Jain said that the institute has constituted a group of technical experts to study the issue of IPO valuation.

The institute, he said, would compare the Indian practices with the best in the world and also study how the other countries have dealt with the problems concerning IPO valuation.

The problem of the IPO valuation came to fore with public issue of some companies plunging below the issue price even on the listing day or afterwards, leaving investors high and dry.