SEBI's action regarding IPO of SME segment - investigation started against more than 12 merchant banks

SEBI has taken a big step in view of the concerns raised due to the many times higher subscription in the IPOs of the Small and Medium Enterprises (SME) segment. According to NDTV Profit, the market regulator has initiated an investigation against more than 12 merchant banks to investigate the concerns raised regarding the due diligence process in the IPOs of SMEs.

SME IPO regulations are slightly softer than mainboard listings. SEBI is now considering whether these regulations can be tightened further. This may include more disclosures, audits and other checks to ensure proper compliance. Concerns continue due to huge surge Earlier, SEBI Chairperson Madhavi Puri Buch has also expressed her concerns about the huge surge in small and medium-cap stocks. Buch talked about possible price manipulation in the SME segment and urged investors to be cautious while investing in this high-risk sector. Valuations of small and medium-cap companies have risen in recent months, but some sectors of the market are bubble-like. Meanwhile, SEBI's whole-time member Ashwini Bhatia has recently discussed a possible consultation paper on the SME listing process. Speaking at the Financing 3.0 Summit, Bhatia indicated that the paper will propose regulatory adjustments affecting exchanges, merchant bankers and other entities involved in SME listings. The regulator aims to make the listing process more robust while keeping investors' interests in mind.

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