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BSE SME IPO index sheds over 13%; enters 'correction' zone over quality, regulatory concerns

After hitting an all-time high of 1,14,991.49 on August 28, the BSE SME IPO index has dropped over 13 percent, shedding around 16,000 points to a low of around 98,290 points on October 7.

October 08, 2024 / 17:21 IST
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Analysts say concerns over inflated valuations and potential manipulation have shaken confidence, with investors fearing regulatory action against companies with questionable IPO practices.

Despite the frenzy around small and medium-sized enterprise (SME) IPOs, the secondary market has delivered a sobering reality check. The BSE SME IPO index has plunged 13 percent in just over a month, slipping into correction territory.

A correction is defined as a decline of 10 percent or more from a recent peak in a short span of time.

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After hitting an all-time high of 1,14,991.49 on August 28, the BSE SME IPO index has dropped over 13 percent, shedding around 16,000 points to a low of around 98,290 points on October 7. So far this year, BSE SME IPO jumped 111 percent while in last one year it gained 171 percent.

Analysts say concerns over inflated valuations and potential manipulation have shaken confidence, with investors fearing regulatory action against companies with questionable IPO practices.