SEBI to CFOs: “Stop the valuation games — Investor trust at Risk!”

• At the ETCFO NextGen Summit, Ananth Narayan Whole-Time Member at SEBI delivered a blunt message to CFOs: “Valuation practices in India are all over the place. We can’t afford to keep playing with numbers.”

• He called out valuation shopping, conflicts of interest, and demanded a radical shift in mindset.

• SEBI wants accountability from CFOs. The era of loose valuations is over.

So, what’s really going on?

India is seeing a wave of startup IPOs, M&As, fundraisings, and private equity deals.

From inflated startup valuations to over-optimistic M&A deals, the cracks are beginning to show — and SEBI is watching closely.

Here’s what’s worrying the regulator:

• Valuation shopping: Companies are hiring valuers who give them the “nicest looking numbers” — and ignoring the fact that the assumptions behind those numbers are often shaky at best.

• Conflicts of interest: Valuers are hired and paid by the companies they’re assessing

• Lack of consistency: Two valuers using different assumptions for the same asset

• No accountability: When a valuation swings dramatically over time — no one is answerable

This raises serious concerns for investors — and for the integrity of India’s capital markets.

SEBI’s new ask

Narayan made a solid point:

“If credit rating agencies have to show their rating history, track record, and assumptions — why don’t valuers?”

Here’s what SEBI is now suggesting:

• Valuers must disclose assumptions and sensitivity ranges
• They should share their track record — were their past valuations accurate or way off?
• And they must be held accountable when things go wrong

SEBI’s message to CFOs?

You’re not just number crunchers. You’re guardians of trust.

“Financial statements are not just formalities. They are a solemn promise to investors.”

If that promise breaks, it’s not just your company that suffers — it’s the entire capital market ecosystem.

Here’s what Narayan recommended CFOs to make reporting more trustworthy:

• Work closely with auditors and audit committees
• Cut down the long gap (70–140 days!) between financial results and the annual report
• Stick to the spirit of accounting standards — not just the checkbox

SEBI context

SEBI regulates listed companies and capital markets, so naturally their focus is on valuations that affect public market disclosures, investor decision-making, and financial reporting — especially those:

• Included in annual reports

• Disclosed during IPOs or corporate actions

• Presented during financial results or board filings

Wrapping up…

India is at a financial inflection point — with a boom in IPOs, private equity, GCC expansion, and capital market participation.

But this growth will only last if the financial storytelling is honest.

Valuation games may win in the short term, but they damage credibility in the long run.

SEBI is urging CFOs to go beyond compliance and lead with integrity.