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SMEs voice concern over tighter IPO norms

Business Standard

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November 21, 2024

Sebi has proposed an overhaul of SME IPO rules to curb fund diversion and malpractices

- KHUSHBOO TIWARI

SMEs voice concern over tighter IPO norms

Of the total 199 small and medium enterprises (SMEs) listed this year so far, 22 had an issue size of less than ₹10 crore, a limit below which the Securities and Exchange Board of India (Sebi) may no longer allow SMEs in the listed ecosystem.

The market regulator on Tuesday proposed an overhaul of the rules governing the initial public offerings (IPOs) of SMEs and corporate governance norms for listed SMEs, following concerns over 'systemic risk' seen in the ecosystem with instances of fund diversion and price manipulation.

While industry players welcomed the review on corporate governance and transparency, many SME firms said the move will make it extremely difficult for them to raise funds and burden them with compliance issues.

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