Sebi mandates 10-minute video disclosure for companies launching IPOs

In a step towards investor awareness, the Securities and Exchange Board of India (Sebi) has directed companies planning to launch initial public offers (IPOs) to release a 10-minute video containing key information related to the issue.

The initiative is to make it easier for investors to understand the features of the public issue and the company.

As per the guidelines, the AV will have to cover details on the business of the company, promoter, management, financial information, pending legal matters, risks, and other details which usually the draft red herring prospectus (DRHP) contains.

“The content of the AV must be factual, non-repetitive, non-promotional and shall not be misleading in any manner,” said Sebi.

The video will be made available on the issuer’s website, social media, on the website of the Association of Investment Bankers of India (AIBI), and in the offer documents through a QR code.

Further, investors have been advised not to rely on any other information related to the issue provided on social media platforms and finfluencers.

Initially, these videos will be made available in English and Hindi.

The guideline is voluntary for companies filing DRHPs from July 1 but is mandated for draft documents filed after October 1.

First Published: May 24 2024 | 7:20 PM IST