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Informist, Wednesday, Sept. 23, 2026

MUMBAI – The Securities and Exchange Board of India is the second-level regulator, and the onus is first on stock exchanges to carry out physical site visits of issuers coming out with initial public offerings as a part of the compliance requirements under the issue of capital regulations, SEBI Executive Director Jeevan Sonparote said on Wednesday on the sidelines of a capital markets conference organised by the Association of Investment Bankers of India. Sonparote was addressing queries from media, and clarified that his comments were in his personal capacity, and not necessarily the view of SEBI.

Sonparote was responding to a question from Informist on whether it would be better if at the pre-IPO phase itself physical site visit verification gets carried out by regulators, instead of discovering problems in post-IPO investigations that have been carried out by SEBI recently. In an interim order Thursday against small and medium enterprise segment company Kore Digital Ltd. for allegedly mis-stating its financial statements, SEBI had said during its preliminary probe it had advised the National Stock Exchange to carry out surprise site visits of the registered offices and principal offices of the company's certain subsidiaries and step-down subsidiaries. Post site visits, it was found no such entities existed on the given addresses, as per the interim order.

SEBI had issued various directions at the end of the interim order. It had directed the National Stock Exchange to not allow migration of Kore Digital to the main board without obtaining SEBI's approval, as it suspected the company was inflating its revenue to satisfy the criteria of migration to the main board of the exchange.

According to Sonparote, the investment banker was responsible for the disclosures made in the draft prospectus, including the addresses of the company's offices and factories. He said when SEBI does an inspection of the investment banking firm, it examines whether it has examined information about the company with due diligence.

The stock exchange is the first-level regulator with regard to verifying the investment banker's compliance with regulations, he indicated. At the end of the day, SEBI has to work on IPO offer documents' processing timeline, he said. If SEBI were to do physical site visits of the issuer, one team member would be thoroughly engaged in doing only this, Sonparote said.

SEBI is likely to come out with a consultation paper within six months on review of investment banker and other aspects of the issue of capital and disclosure requirements regulations. The market regulator is also keen that the investing banking community holds workshops to raise awareness among itself and issuers, particularly SME segment issuers, about plugging gaps in regulatory compliance.  End

Reported by Rajesh Gajra

Edited by Avishek Dutta

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