Mumbai: In a move aimed at enhancing transparency and investor protection, the Securities and Exchange Board of India (SEBI) has directed the Industry Standards Forum (ISF) to develop a standardized set of key performance indicators (KPIs) for inclusion in initial public offering (IPO) prospectuses.
The ISF, comprising representatives from industry bodies like ASSOCHAM, FICCI, and CII, is currently working to align these KPIs with SEBI regulations. The focus is on identifying the most relevant KPIs that extend beyond traditional financial and operational metrics, providing investors with a comprehensive understanding of a company’s performance.
The move comes in response to the increasing number of startups and digital companies going public, many of which have been loss-making but command significant valuations based on private market funding. SEBI aims to ensure that these companies disclose the same metrics to public shareholders as they do to private equity and venture capital investors.
The classification of financial data as KPIs and the inclusion of all operational metrics are points of discussion among industry stakeholders. While standardization is essential, the specific KPIs may vary across different sectors.
The IPO market, after a slowdown in 2022 and 2023, is witnessing a resurgence in 2024. Several new-age tech companies, including Go Digit, FirstCry, and Unicommerce, have already made successful debuts, while others like Ola Electric and Ecom Express are preparing for their public listings.
By mandating standardized KPIs, SEBI aims to create a level playing field for investors and improve the overall quality of IPO disclosures.
