SEBI Directs ISF To Evolve Standard KPIs For IPO Prospectus

The Securities and Exchange Board of India (SEBI) has reportedly directed the Industry Standards Forum (ISF) to evolve a standardised set of key performance indicators (KPIs) for inclusion in the draft prospectus of initial public offerings (IPOs).

The ISF, which includes representatives from industry bodies such as ASSOCHAM, FICCI, and CII, is currently working on aligning these compliance standards with SEBI regulations, as per a Moneycontrol report.

The ISF has been tasked with determining the most relevant KPIs for IPO disclosures, extending beyond just financial and operational metrics. While the KPIs will be standardised, they may vary across different sectors.

Industry stakeholders have also noted some uncertainty regarding the classification of financial data as KPIs. Additionally, there is an ongoing debate among industry representatives about whether all operational metrics, despite their importance in tracking business performance, should be labeled as KPIs.

The issue of KPI disclosures gained prominence following a wave of listings from startups and digital companies, many of which were loss-making and sought valuations based on their private market fundraising rounds.

SEBI believes that these companies should disclose the same metrics shared with private equity and venture capital investors to all potential shareholders during their IPOs.

After a slowdown in IPO activity in 2022 and 2023 caused by geopolitical tensions, a severe funding winter, and macroeconomic challenges, startups are now gearing up in large numbers to go public in 2024.

In the first seven months of the year alone, 10 new-age tech companies have already made their debut on the stock exchanges, including Go Digit General Insurance, FirstCry, Unicommerce, TBO Tek, Ola Electric, Awfis, ixigo, Menhood, TAC Security, and Trust Fintech.

Recently,Unicommerce listed at INR 235 apiece on the NSE, a premium of 117.59% over its issue price of INR 108. On the NSE, it debuted at a premium of 112.96% FirstCry too made a strong debut and listed at a premium of 40% on the NSE and at a 34.4% premium on the BSE.

However, EV major Ola Electric had a muted market debut as the stock opened at a flat INR 75.99 apiece on the BSE as against its IPO issue price of INR 76.

Last week, logistics startup Ecom Express filed its DRHP with the markets regulator. In addition, coworking startup Smartworks also filed its DRHP last week.