SEBI plans SME portal to boost market access for small businesses

Currently more than 1,400 SMEs are listed on NSE and BSE platforms, with a combined market capitalisation of around Rs 4.1 trillion. Over 350 SMEs have migrated to the Main Board, highlighting the platform’s role as a growth escalator.

• SEBI plans a digital portal to simplify compliance for SME issuers
• SEBI to open Local Offices in state capitals to improve SME market access
• SME IPOs raised Rs 105 billion in FY26 up to January 31

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In a move aimed at easing capital market access for small and medium enterprises (SMEs), the Securities and Exchange Board of India (SEBI) is planning a dedicated digital portal to simplify compliance for SME issuers.

Speaking at the India SME Finance & Investment Summit, SEBI Chairman, Tuhin Kanta Pandey said the regulator is reviewing the Listing Obligations and Disclosure Requirements (LODR) framework to eliminate redundancy and ambiguity, while also examining SME-specific compliance requirements to enhance ease of doing business without compromising investor protection. Pandey said, "SEBI, in coordination with stock exchanges and key stakeholders, is working towards a dedicated SME portal - a one-stop digital gateway with issuer information and clearly mapped compliance guidance. This initiative will enhance transparency and simplify  regulatory processes for issuers."

SEBI, in coordination with stock exchanges and stakeholders, is working on a one-stop SME portal that will provide issuer information and clearly mapped compliance guidance. The regulator also plans to open Local Offices in state capitals in a phased manner to improve access to listing and post-listing processes for SMEs.

Currently more than 1,400 SMEs are listed on NSE and BSE platforms, with a combined market capitalisation of around Rs 4.1 trillion. Over 350 SMEs have migrated to the Main Board, highlighting the platform’s role as a growth escalator.

In FY25, 241 SME IPOs raised Rs 98 billion, while in FY26 up to January 31, 232 SME IPOs have already mobilised Rs 105 billion. One SME has also raised debt through the stock exchange platform this fiscal year.

Despite the growth, it is noted that SME market participation remains regionally concentrated. The Western region accounts for 44 percent of SME IPOs this financial year, followed by the North (32 percent), East (14 percent) and South (10 percent), highlighting the need for deeper outreach beyond traditional centres.

Pandey said listing on a stock exchange can be transformative for SMEs, enabling them to raise long-term growth capital, reduce dependence on banks, and establish transparent, market-based valuations. It also creates a platform for future fund-raising.

He noted that listing brings a governance upgrade, strengthens investor confidence and can lower the cost of capital over time. It also enhances brand visibility and credibility with customers, suppliers and lenders. At a systemic level, greater SME participation diversifies financing channels, reduces concentration risk in banks and frees up banking capacity for core lending.

However, he acknowledged that the SME market remains under-scaled. Many SMEs hesitate due to unfamiliarity with capital markets, limited access to credible intermediaries and the perceived high cost of IPOs. Procedural complexities and compliance requirements are often seen as burdensome, especially for companies with evolving governance systems.

Pandey also referred to past instances where certain SMEs misused regulatory relaxations, including diversion of issue proceeds and unfair trade practices, which dented investor confidence. In response, SEBI strengthened the SME framework to ensure only companies with soundtrack records access public markets.

Stock exchanges have also tightened due diligence, increased engagement with promoters and merchant bankers, conducted site visits, and deployed AI tools to process DRHPs faster — all aimed at improving issuer quality and safeguarding investors.

Pandey further informed that SEBI is also working to deepen the corporate bond market and plans pan-India awareness programmes to encourage SMEs to tap market-based debt alongside equity financing.