Digital Gold Investment Risk: Securities and Exchange Board of India (SEBI) Chairman Tuhin Kant Pandey has cautioned those investing in digital gold. SEBI has said in clear words that digital gold is neither considered a security nor does it come under the scope of commodity derivatives.

According to SEBI, if a platform defaults, then in such a situation SEBI has no means to protect investors. SEBI has advised those investing in digital gold to exercise utmost caution.

SEBI issued statement

Chairman Tuhin Kant Pandey informed in the National Conclave on REITs and InvITs – 2025 that SEBI does not regulate the digital gold industry. However, this has been demanded for a long time. He told the investors that while investing in digital gold, they must have complete information about the platform and its conditions.

SEBI currently regulates gold investments made in gold ETFs and tradable gold securities. Investments made in both of these come under the purview of SEBI.
What is digital gold?

Physical purchase of gold is not done under digital gold. This is a completely digital form of gold. In India, different platforms like Paytm, Phone Pay, Google Pay provide the facility to investors to invest in digital gold. Talking about the figures, in 2021 the digital gold market was worth Rs 5,000 crore, which has now increased to around Rs 13,800 crore.

Disclaimer: (The information provided here is being given for information only. It is important to mention here that investment in the market is subject to market risks. Always take expert advice before investing money as an investor. ABPLive.com never advises anyone to invest money here.)

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SEBI on IPO Valuation: Securities and Exchange Board of India (SEBI) Chairman Tuhin Kant Pandey has said that SEBI will not interfere in any way regarding high valuation in Initial Public Offering (IPO). He clarified that determination of valuation depends on the assessment of the market and investors and not on the control of the regulator.

What did SEBI Chairman say?

According to news agency PTI-Bhasha, while talking to journalists during a program on Thursday, Pandey said – We do not decide the evaluation. It completely depends on the assessment of the investor. The market should have the freedom to determine prices independently based on opportunities. This statement has come at a time when concern was raised in the market regarding the high valuation of Lenskart’s Rs 7,200 crore IPO recently.

The SEBI chief acknowledged that valuation concerns have been raised many times in the past — especially during the IPOs of new-age digital companies like Nykaa, Paytm. In these cases too, questions were raised among investors whether the valuations of the companies were in line with their actual earnings and prospects.

At the event, Pandey also told companies that they should be ‘authentic and transparent’ about their environmental, social and governance (ESG) commitments. He said – ESG should not just be a part of branding. It should be linked to measurable results, independent audits and actual board oversight. He also added that in today’s time, ESG is not an optional option, but an essential component for business sustainability.

Suggestions on new challenges

SEBI Chairman urged the directors and senior management of companies to enhance their capacity in the following areas — Cyber ​​Risk Management, Behavioral Science, Data Ethics and Sustainability. He said that in today’s time, the complexity of the market cannot be handled by formal oversight alone, but it requires informed and prudent judgment.

This clear stand of SEBI shows that the regulator will not interfere in IPO valuation. Now investors will have to take investment decisions at their own discretion. Also, the regulator’s focus will now be on strengthening the ESG compliance and corporate governance of companies, so that transparency and accountability are maintained in the market.

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