Securities and Exchange Board of India (Sebi) Chairman UK Sinha said companies can be creative and innovative in their advertisements aimed at luring investors to their initial public offerings as long as they don't mislead them and the ads shouldl have the risk disclosures and facts, the PTI news agency reported. The report said that for the past few years, a slowdown has been experienced by the primary market since firms have been finding it unattractive to sell shares in the capital market to get funds, although the regulator has already taken steps to revitalize it.

Sinha said it is up for the companies to decide if they want to be innovative in their advertisements to make their public offers more attractive while revealing the key risk factors. The report said that the public offer ads, which are geared to hard-sell IPOS and FPOs or follow-on public offers, usually contain various details but lacking in the creativity normally found in other ads.

The report quoted Sinha, who said, "We want the advertisements should not be misleading and the risk factors and substantial facts are not suppressed. The disclosure about risk factors and substantial facts are mandatory requirements and we cannot compromise on that. But, within this framework, if the companies want to be innovative, they can certainly do it and they are most welcome to do that. We have not stopped them from being creative or innovative, but certain things have to be provided."

As part of its steps to bolster the primary market, the Sebi board approved some measures aimed at making the fundraising process easier, the report stated. For starters, the board gave its approval to make the IPO grading mechanism by credit agencies voluntary. It has also allowed firms to submit their shelf prospectus with one-year validity for multiple issuance of debt securities, the report said.