Owing to increase in filings of offer documents for IPOs under Regulation 6(2) of the SEBI ICDR Regulations by companies (especially new age technology companies (‘NATCs’)) which do not have a track record of having operating profits in the preceding three years, SEBI issued a consultation paper, dated February 18, 2022 (‘Consultation Paper’), proposing that in addition to disclosing financial ratios such as earnings per share (‘EPS’), price to earnings (‘P/E’), return on net worth (‘RoNW’) and net asset value (‘NAV’) as per extant requirements, companies should also be required to make disclosures on key performance indicators (‘KPIs’) of their businesses that have been considered / have a bearing on arriving at the issue price. This would entail disclosure of material KPIs presented to pre-IPO investors during the three years prior to the IPO along with an explanation of how these KPIs contribute to form the basis for issue price, certification of KPIs by statutory auditors, disclosure of KPIs in a clear, consistent and precise manner which is not misleading, comparison of KPIs with Indian and global listed peer companies and comparison of KPIs over time. SEBI has also proposed that a company must disclose its valuation and weighted average cost of acquisition based on primary issuances, and secondary acquisition of shares, excluding gifts, in the 18 months prior to the date of filing of the relevant offer document, which are equal to or more than 5% of the fully diluted paid-up share capital of the company (calculated on the pre-issue capital on the date of allotment), in a single transaction or a group of transactions over a short period of time. Further, SEBI has proposed that the company should offer a detailed explanation for the IPO price / cap price vis-à-vis the prices at which the above-mentioned transactions were carried out, along with a comparison of the company’s KPIs and financial ratios, for the last two full financial years and interim period (if any).