SEBI mulls AV disclosures for cos taking IPO route

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In a move to make information pertaining to IPO-bound companies easily available to the public, markets regulator SEBI is considering asking companies to make necessary disclosures via an audio-visual (AV) presentation that does not exceed 8 minutes. As per SEBI, this would further facilitate the public in quickly understanding the salient features of the issue.

In its consultation draft circular released on Tuesday, the regulator proposed that such an AV be prepared by the lead manager to the public issue in both English and Hindi. This will include all disclosures made by the company in its DRHP (draft red herring prospectus) and RHP (red herring prospectus). The lead manager would be entirely responsible for all content presented in the AV.

The AV should cover all significant disclosures made under public issue offer documents such as risk factors, capital structure, objects of the offer, business of the issuer, financial information, litigations and material developments.

As per guidelines, it is to begin with the following disclaimer to investors- “Investors are advised not to rely on any other document, content or information provided on the offer on the internet/online websites/social media platforms/micro-blogging platforms and by the finfluencers since the same is not approved/commissioned/paid by the company or its promoter(s)/directors/KMPs in any manner”

The circular is inviting comments from the public till April 9, 2024. It also emphasised on how the AV content, which would be updated once the company issues a RHP, should be factual, non-repetitive and non-promotional.

Not only will it be made available on the digital and social media handles of the issuer and Association of Investment Bankers of India, it would be mandatory for the issuer/lead manager to submit the same within five working days of submission/resubmission of DRHP and RHP.